PSU bank stocks slid up to 3% after the RBI confirmed the Expected Credit Loss (ECL) framework rollout from April 2027. Investors fear higher provisioning and capital pressure, with brokerages estimating a potential 5–10% hit to net worth. While the rules arrive gradually, lenders still face near-term uncertainty over balance-sheet impact.
The Reserve Bank of India will introduce the Expected Credit Loss (ECL) provisioning framework starting April 1, 2025, requiring banks to move from loss based provisioning to a more proactive approach. RBI has outlined transition measures to support implementation and has clarified that Non-Performing Asset classification will remain unchanged, even as banks adjust credit cost recognition.
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