RBI defines NPAs in gold, interest rate exposures

Pursuant to the earlier mandate for the banks to calculate their off-balance sheet exposures in the interest rate and foreign exchange derivative transactions and gold, the Reserve Bank of India (RBI) has said that only the amounts unpaid in cash to the bank for a period of 90 days or more would be classified as non-performing assets.

While computing the credit exposure, banks would, however, be allowed to exclude the ‘sold options’, if the entire premium or the fee from the derivative transaction has been received.

While the computation of credit exposures would be treated as per the current mark-to-market value of the contract, these contracts would attract provisioning as for the loan assets in the standard category.