To enhance the resilience of the financial sector, the Reserve Bank on Wednesday announced that the expected credit loss (ECL) framework for provisioning is proposed to be made applicable to all financial institutions from April 1, 2027.

Announcing the fourth bi-monthly monetary policy, RBI Governor Sanjay Malhotra said the ECL framework of provisioning with prudential floors is proposed to be made applicable to all Scheduled Commercial Banks (excluding Small Finance Banks (SFBs), Payment Banks (PBs), Regional Rural Banks(RRBs)) and All India Financial Institutions (AIFIs) with effect from April 1, 2027.

"They will be given a glide path (till March 31, 2031) to smoothen the one-time impact of higher provisioning, if any, on their existing books," he said.

The guidelines are expected to

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