According to a report by ratings agency Care, banks in the country would restructure new loan worth Rs 57,782 crore and this would raise the total recast loan book to Rs 312,022 crore next fiscal (2013-14).
The report expects banks to carry out most of the restructuring in pipeline during the fourth quarter of this fiscal and through next fiscal if the draft RBI guidelines on restructured accounts are implemented as it is.
The new norms, if implemented, would prompt banks to upgrade fresh restructured accounts by the end of 2014-15 to avoid incremental provisioning of 1.25 per cent.
Under the draft RBI guidelines on provisioning for standard restructured accounts, banks will be asked to set aside 3.75 per cent for each of the restructured accounts in 2013-14, which will increase to 5 per cent by 2014-15. Provisioning requirement stands at 2.75 per cent at present, which was 2 per cent till last October.
The draft norms also make it easier for banks to reclassify accounts as well as the restructured assets as standard accounts.
The report expects the total amount of restructured loan to decline as assets get reclassified and upgraded under the revised norms.
According to the report, there would be an instant upgradation of at least 25 per cent of the outstanding restructured assets of 2011-12, while 60 per cent of the outstanding standard restructured assets of 2011-12 will be restructured afresh in 2012-13.
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