The Reserve Bank of India’s Expected Credit Loss (ECL) framework marks a shift from the traditional incurred-loss model to a forward-looking approach that requires banks to recognise potential credit losses before defaults occur. Loans will be classified into three stages based on changes in credit risk, with corresponding provisioning requirements. The framework aims to strengthen financial stability, improve transparency, and align India’s banking regulations with global standards. Banks will need stronger data systems, governance, and risk assessment capabilities to implement the new regime effectively.
Please click here to read the full article by Nand Gopal Anand, Partner; Harshit Dusad, Partner and Vrindesh Patel, Principal Associate, published in BW Legal World.
Nand is a Partner in the Gurugram office of the firm. He specialises in Banking & Finance, with specific focus on general lending, external commercial borrowings, overseas direct investments, project finance, trade finance, shipping finance and real estate finance related transactions.