Business News | RBI Asks Banks to Ensure Automation of NPA Identification
by ANIMumbai (Maharashtra) [India], Sep 14 (ANI): The Reserve Bank of India (RBI) on Monday asked banks to put in place and upgrade their systems and ensure automation of non-performing asset (NPA) identification.
"It is observed that the processes for NPA identification, income recognition, provisioning and generation of related returns in many banks are not yet fully automated. Banks are still found to be resorting to manual identification of NPA and also overriding the system generated asset classification by manual intervention in a routine manner," it said.
The central bank asked banks to put in place and upgrade their systems to conform to the guidelines by June 30, 2021.
All borrowal accounts including temporary overdrafts irrespective of size, sector or types of limits will be covered in the automated IT based system for asset classification, upgradation and provisioning processes, said the RBI. Banks' investments should also be covered under the system.
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In addition, income recognition or derecognition in case of impaired assets (NPAs/NPIs) will be system-driven and the amount required to be reversed from an income account should be obtained from the system without any manual intervention.
"The system will handle both downgrade and upgrade of accounts through straight through process (STP) without manual intervention," the RBI said.
(ANI)
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