RBI requires bank provisions for fraudulent loans | Reuters

MUMBAI The Reserve Bank of India (RBI) has asked banks to make provisions for the entire amount of loans extended to an entity, in case fraud is detected.

In a circular issued on Monday, the RBI said that banks will, however, be allowed  to adjust the financial collateral applicable under Basel 3 rules while providing for such accounts.

The central bank said lenders will be allowed to spread the provisioning for such fraudulent accounts over no longer than four quarters.

The rules come at a time when there have been local media reports about the discrepancy in food grain stockpiles purchased through bank loans by the Punjab state government, leading to speculation that the loans may go bad.

(Reporting by Suvashree Choudhury, editing by Larry King)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date: Apr 18, 2016 23:45 PM

Also Watch

Watch: Firstpost test rides the new Thunderbird 500X in Goa and walks you through the Royal Enfield Garage Cafe
  • Tuesday, April 17, 2018 Varun Dhawan on Shoojit Sircar's October, 5-star reviews and working with Anushka Sharma in Sui Dhaaga
  • Saturday, April 14, 2018 Ambedkar Jayanti: Re-visiting Babasaheb's ideals exposes fake Dalit politics of Rahul Gandhi and Congress
  • Monday, April 9, 2018 48 hours with Huawei P20 Pro: Triple camera offering is set to redefine smartphone imaging
  • Monday, April 16, 2018 Rajyavardhan Singh Rathore interview: Sports can't be anyone's fiefdom, we need an ecosystem to nurture raw talent

Also See