RBI vide Notification No. RBI/2021-22/17 has notified the Asset Classification and Income Recognition following the expiry of Covid-19 regulatory package.
I. Refund/adjustment of ‘interest on interest’
i. All lending institutions shall immediately put in place a Board-approved policy to refund/adjust the ‘interest on interest’ charged to the borrowers during the moratorium period, i.e. March 1, 2020 to August 31, 2020 in conformity with the above judgement.
ii. Methodology for calculation of the amount to be refunded/adjusted for different facilities shall be finalized by the Indian Banks Association (IBA) in consultation with other industry participants/bodies, which shall be adopted by all lending institutions.
II. Asset Classification
i. In respect of accounts which were not granted any moratorium in terms of the Covid19 Regulatory Package, asset classification shall be as per the criteria laid out in the Master Circular for Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances or other relevant instructions as applicable to the specific category of lending institutions (IRAC Norms).
ii. In respect of accounts which were granted moratorium in terms of the Covid19 Regulatory Package, the asset classification for the period from March 1, 2020 to August 31, 2020 shall be governed in terms of COVID-19 Regulatory Package for Asset Classification and Provisioning. For the period commencing September 1, 2020, asset classification for all such accounts shall be as per the applicable IRAC Norms.
https://www.rbi.org.in/Scripts/Notificatio nUser.aspx?Id=11872&Mode=0