Held: Stage 1 at 0.25% · Instrument: 0.40%
Understated the floor on every deposit-backed and LIC-backed advance.
Guide · Provisioning floors
What the Directions say about provisioning floors
Paragraph 82 of the RBI (Commercial Banks — Asset Classification, Provisioning and Income Recognition) Directions, 2026 sets a product-wise minimum below which a provision may not fall, whatever the expected credit loss model produces. It takes effect on 1 April 2027. The schedule below is the one this tool applies, read line by line against the instrument on 5 September 2026.
The floor is not the model
An ECL model can produce a number the Directions will not accept.
The two are computed separately and the higher one is reported. A well-calibrated model on a secured corporate exposure four years into default might arrive at 62%; paragraph 82 says the provision is not less than 100%, so the reported figure is 100% and the difference is a regulatory uplift, not a modelling result. A model whose output is never compared against the schedule will understate provisions on exactly the exposures a supervisor looks at first.
Which means the floor has to be attached to the product, not to the sector. The schedule is product-wise, and two loans to the same borrower in the same sector attract different minimums — a housing loan to an individual and an unsecured personal loan sit in different rows. Mapping a bank’s own product codes onto these categories is required configuration, and no amount of reading the instrument supplies it.
The Stage 3 tracks
Once an exposure is in default the minimum rises with how long it has been there, and how far it rises depends on which track the product sits on. Three of the four tracks are below; all of them terminate at 100%.
The standard track
82(1) and 82(5) — corporate, medium enterprise, farm credit, banks and NBFCs
| Time in default | Secured | Unsecured |
|---|---|---|
| Up to 1 year | 25% | 40% |
| 1 to 2 years | 40% | 100% |
| 2 to 3 years | 55% | 100% |
| 3 to 4 years | 75% | 100% |
| More than 4 years | 100% | 100% |
The low track
82(2) and 82(5) — gold loans, advances against deposits, state government exposures, and housing loans to individuals
| Time in default | Secured | Unsecured |
|---|---|---|
| Up to 1 year | 10% | 25% |
| 1 to 2 years | 20% | 100% |
| 2 to 3 years | 30% | 100% |
| 3 to 4 years | 40% | 100% |
| More than 4 years | 100% | 100% |
Unsecured retail, which has a track of its own
82(3)(x) — two bands, and no secured column, because the category is unsecured throughout
| Time in default | Secured | Unsecured |
|---|---|---|
| Up to 1 year | 25% | 25% |
| More than 1 year | 100% | 100% |
Five places a careful reading changes the answer
This schedule was first built from a published analysis of the Directions. Reading the instrument changed five of the eleven categories.
The Directions themselves, retrieved from rbi.org.in. This replaced a reconciliation against published secondary analysis, which agreed with the engine on eight categories out of eleven and missed every one of the defects below.
They are set out below as they were recorded — what the engine held, what the instrument says, and what the difference is worth. Two of the five over-provided and are included for the same reason as the rest: a schedule that is only ever wrong in the prudent direction is still wrong, and a supervisor asking why a defaulted housing book carries thirty-five points more than the minimum is a question with no good answer.
Held: 10/15, 15/25, 25/30, 30/40, 40/40 · Instrument: 10/25, 20/100, 30/100, 40/100, 100/100
Not a lighter schedule but a different one that never reached full provision. An unsecured exposure four years into default attracted 40% where the Directions say 100% — sixty points, on the oldest defaults in the book.
Held: The standard five-band Stage 3 track, opening at 40% unsecured · Instrument: Its own two-band track: 25% in year one, then 100%
Over-provided a defaulted unsecured retail book by fifteen points in year one.
Held: The standard Stage 3 track · Instrument: The low track
Over-provided a defaulted housing book by fifteen points in year one and thirty-five by year four.
Held: Absent from the schedule entirely · Instrument: 0.40% / 5%, on the standard Stage 3 track
An interbank and NBFC book had no regulatory floor applied to it at all.
What this page is not
Every rate above is located in the text of paragraph 82, held verbatim as a fixture, and compared to it by a test that fails the build on a typo. That is worth something and it is not the same as authority. Three things remain outside what any test can settle:
- Whether it is still the law.A regulation is a fact about a moment. This one was current on 5 September 2026; an amendment lands when it lands, and no test notices.
- Which of your products is which category.Paragraph 86 routes anything unnamed to the residual, so nothing goes unfloored — but a housing loan booked under a code your mapping calls corporate attracts the wrong minimum, and that is your judgement to make.
- Who answers for it.If these rates are wrong and provisions are misstated, somebody is accountable to a supervisor. Accountability is not a property a calculation can hold. In the tool, this schedule is not signed off by anybody, and that keeps blocking review until a person puts their name to it.
Check it yourself
The instrument: Reserve Bank of India (Commercial Banks — Asset Classification, Provisioning and Income Recognition) Directions, 2026 — RBI/DOR/2026-27/398, DOR.STR.REC.No.6/21.06.011/2026-27, 27 April 2026, paragraph 82. Transcribed from the instrument itself.