Banks shall make provisions, with effect from the year

Solution

Banks shall make provisions, with effect from the year ending March 31, 2003, on the net funded country exposures on a graded scale ranging from 0.25 to 100 percent Banks are required to make provision for country risk in respect of a country where its net funded exposure is one per cent or more of its total assets. The provision for country risk shall be in addition to the provisions required to be held according to the asset classification status of the asset. However, in the case of lsquo;loss assetsrsquo; and lsquo;doubtful assetsrsquo;, provision held, including provision held for country risk, may not exceed 100% of the outstanding