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Unformatted text preview: 150 Unrated Unrated Unrated Unrated 100 02/23/13 Capital Adequacy Framework 24 Claims on Non-Resident Corporates – Risk Weights Risk S&P/ AAA Fitch To AA Ratings Moody’s Aaa to ratings RW (%) Aa 20 02/23/13 A 50 Below BB A BBB to BB Baa to Ba Below Unrated 100 Ba 150 100 Capital Adequacy Framework Unrated 25 Regulatory Retail Portfolio - Criteria Regulatory • Orientation criterion - exposure (fund and non fund based) to individual person or persons or to a small business. Turnover Rs.50 Crores.(Average for last 3 Years) Turnover Product criterion - The exposure (both fund­based and non The exposure (both fund­based and non fund­based) takes the form of any of the following: revolving credits and lines of credit (CCs/ ODs), term loans and leases (e.g. installment loans and leases, student and educational loans) and small business facilities and commitments. Granularity criterion- regulatory retail portfolio is sufficiently diversified to a degree that reduces the risk in the portfolio – no aggregate exposure to one counterpart can exceed 0.2% of the overall regulatory retail portfolio Low value of individual exposures- the maximum aggregate retail exposure to one counterpart cannot exceed an absolute threshold limit of Rs. 5 Crores. absolute 02/23/13 Capital Adequacy Framework 26 Exclusion in Regulatory Retail. Exclusion The following claims, both fund based and non fund based, shall be excluded from the regulatory retail portfolio: (a) Exposures by way of investments in securities (such as bonds and equities), whether listed or not; (b) Mortgage Loans to the extent that they qualify for treatment as claims secured by residential property9 or claims secured by commercial real estate10; (c) Loans and Advances to bank’s own staff which are fully covered by superannuation benefits and / or mortgage of flat/ house; (d) Consumer Credit, including Personal Loans and credit card receivables; (e) Capital Market Exposures; (f) Venture Capital Funds. 02/23/13 Capital Adequacy Framework 27 Claims Secured by Residential Property Claims Amount of Loan Risk Weight (%) Up to Rs.30 lakh 30 Rs. 30 lakh and above but below Rs. 75 lakh 50 Lending for acquiring residential property below Rs. 75 lakh, having LTV ratio of more than 75 per cent, will attract a risk weight of 100 per cent. The risk weight for residential housing loans of Rs. 75 lakh and above, irrespective of the LTV ratio, will be 125 per cent to prevent excessive speculation in the high value housing segment. Claims classified as Commercial Real Estate Exposure Claims mentioned above will attract a risk weight of 100 per cent. 02/23/13 Capital Adequacy Framework 28 Past Dues ( NPAs) Past Past due loans • The unsecured portion of any loan that is past due for more than 90 days, net of specific provisions, to be given higher risk weight • 150% if specific provision <20% o/s • 100% if provision >or= 20% • if provision = or > 50% with supervisory discretion for 50% weight 100% if provision > or = 15% i...
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