While there is little doubt that all lenders are facing the threat of higher credit risk because of the Covid-19 pandemic and the lockdown, some class of lenders, such non-banking financial companies (NBFCs), are expected to face even higher provisioning due to the relatively new accounting norm — Indian Accounting Standards (Ind-AS).
This is because provisioning under Ind-AS, known as expected credit loss (ECL), is ascertained based on the expectations of future credit losses, rather than incurred losses followed under GAAP (generally accepted accounting principles). ...
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First Published: Mon, May 04 2020. 21:29 IST
