Lenders will be provided with a glide path (until March 31, 2031) to mitigate the one-off impact of any higher provisioning on their existing portfolio
Incremental provisioning that the Bank of India (BoI) may have to make to meet the RBI’s proposed provisioning norms based on expected credit losses (ECL) could have an impact of one percentage point on the annualized capital-risk-weighted asset ratio (CRAR).
The central bank plans to introduce a lender provisioning framework (replacing the incurred loss-based provisioning framework) for lenders with effect from April 1, 2027. They will receive a sliding path (until March 31, 2031) to mitigate the one-off impact of any higher provisions on their existing portfolio.
Rajneesh Karnatak, MD and CEO of BoI, noted that the one percentage point impact on CRAR due to ECL is around ₹4,600 crore to ₹4,700 crore.
“Given that we have already achieved a net profit of around ₹4,800 crore in the first half of FY26 and we estimate a net profit of around ₹10,000 crore in this financial year, the impact on CRAR will be only 1 per cent…,” he said.
Infrastructure bonds
While the Bank has received board approval to raise around ₹20,000 crore through infrabonds in FY26, it has no plans, as at present, to tap this route for raising funds.
“At least in the third quarter, we will not raise funds through infra bonds. We will see how the market evolves and then decide on raising funds,” Karnatak said.
He noted that the current deposit rate is much lower than the rate at which funds can be raised through infra bonds.
Published on October 17, 2025
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