New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    The term “SICR” discussed in the recently published

    RBI's released Discussion Paper on Introduction of Expected Credit Loss (ECL) Framework for Provisioning by Banks stands for?
    A Significant Increase in Credit Risk Correct Answer Incorrect Answer
    B Systematic Internal Credit Rating Correct Answer Incorrect Answer
    C Standardized Internal Credit Reporting Correct Answer Incorrect Answer
    D Sectoral Internal Credit Review Correct Answer Incorrect Answer
    E Statistical Inference for Credit Risk Correct Answer Incorrect Answer

    Solution

    Definition of significant increase in credit risk and definition of default: Significant Increase in Credit Risk (SICR) For the purpose of determining SICR, RBI has proposed that: • SICR should be assessed at the level of each counterparty which is holding an instrument (under Ind AS 109, the SICR assessment is at an instrument level) • Following exposures/counterparties would be considered to havea SICR: •Stressed exposures classified under a ‘watch-list’ or equivalent classification for stressed exposures •Financial assets, the contractual payments on which are 30 days past due (this is a rebuttable presumption) •Counterparties that are overdue for more than 60 days.

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