For unsecured doubtful advances outstanding for more

Solution

As per RBI guidelines on asset classification and provisioning norms: • Advances are classified into sub-standard, doubtful, and loss assets based on their period of default and recovery prospects. • For doubtful assets, provisioning depends on whether the advance is secured or unsecured, and the time periodfor which it has remained doubtful. • Specifically, for unsecured doubtful advances that have remained doubtful for more than 3 years, banks must create a 100% provision. • This ensures that banks maintain adequate buffers against the high probability of loss in such cases. Thus, the provisioning requirement is 100% for unsecured doubtful advances exceeding three years.