What does day one cost?

The move from IRAC provisioning to ECL strikes an adjustment on 1 April 2027 against opening retained earnings — never through profit or loss — and the RBI allows a declining fraction of it back into CET1 over four years. This works out both.

The published worked example

These are not your figures. The analysis this schedule was transcribed from works through a ₹700 crore adjustment and arrives at about ₹370 crore of first-year relief — four fifths of it, net of 34% tax. Change any field and this notice goes. Amounts are in ₹ crore.

Your position

ECL at 1 April 2027Measured under the new frameworkIRAC provisions at 31 March 2027What you carry the day beforeEffective tax ratePer centCET1 capitalOptional — needed for a ratioRisk-weighted assetsOptional — needed for a ratioYears to transitionA bank may finish sooner. It cannot take longer.

The day-one adjustment

To opening retained earnings₹700 cr

CET1 ratio, before any relief13.03% (-30.8 bp)

The adjustment is taken to opening retained earnings on the transition date. It does not pass through profit or loss, so no part of it is a result for any period.
The add-back reaches CET1, and so tier 1, total capital, the leverage ratio and large-exposure limits. It does not reach tier 2, it does not reduce exposure amounts under the standardised approach, and it does not reduce the leverage ratio exposure measure.
The relief is a capital measure and nothing else: it does not change the provisions themselves. A bank must calculate and maintain ECL provisions from FY2027-28 whether or not it takes the transitional arrangement.
Taking the arrangement carries a disclosure. A bank must say whether it has applied it, and what it did to the capital and leverage ratios against the fully loaded ratios that would have stood without it — which is the comparison in this schedule.

The glide path

Financial year	Fraction	Gross	Added to CET1	Relief
2027-28	4/5	₹560 cr	₹370 cr	+24.6 bp
2028-29	3/5	₹420 cr	₹277 cr	+18.5 bp
2029-30	2/5	₹280 cr	₹185 cr	+12.3 bp
2030-31	1/5	₹140 cr	₹92 cr	+6.2 bp
From 2031-32	No relief. The full adjustment sits in capital from here.

RBI (Commercial Banks — Asset Classification, Provisioning and Income Recognition) Directions, 2026 — RBI/DOR/2026-27/398, paragraphs 106 to 112. Read from the instrument on 2026-09-12 and machine-checked against it, not transcribed from an analysis of it.