The Reserve Bank of India, on Tuesday, sharply raised the provisioning for restructured assets to 2.75 per cent from the earlier 2 per cent, a move that will hit the bottomlines of banks.
Detailed guidelines in this regard will be issued shortly, it added.
According to the central bank data, the corporate debt restructuring or CDR cases jumped to a high of 392 as on March, 2012, from 225 in March, 2009, taking the amount at stake to Rs.2.07 lakh crore from Rs.95,815 crore.
The current fiscal has seen further spurt in CDR cases with the first quarter alone seeing nearly 30 cases, totalling worth over Rs.40,000 crore.
The second quarter also witnessed a major spurt in CDR cases with all the state-run banks, which have announced their Q2 earnings, reporting massive spike in CDR assets.
The RBI move will dearly impact the banks, especially PSBs, which have witnessed an unprecedented rise in loan restructuring due to economic stress of their borrowers.
Some critics also call it a ploy by banks to restructure loans, and not show them as bad assets, to protect bottomlines.