RBI to issue rules on provisioning soon

The Reserve Bank of India will soon issue guidelines on meeting provisioning rules and some banks have sought time to meet them, its deputy governor Shyamala Gopinath said on Friday. "Banks have made certain submissions to us in the policy, in terms of little more time. We are going to come up with guidelines soon," Gopinath said. The Reserve Bank in its policy review on Tuesday proposed to advise banks to augment their provisioning cushions consisting of specific provisions against non-performing assets as well as floating provisions, and ensure that their total provisioning coverage ratio, including floating provisions, is not less than 70 percent. "Banks should achieve this norm not later than end-September 2010," the policy document said. She also said RBI was working out details regarding margin payments and risk management with regards to the introduction of trade in cross-currencies in the currency futures market. "The issue is really working out the risk mangement issues and what should be the margin," she said.