Economics · Banking Sector
The RBI introduced the 'Expected Loss (EL)-based Loan Loss Provisioning' framework for banks. Which of the following correctly describes this framework? 1. It replaces the existing 'Incurred Loss' model, requiring banks to recognise potential losses earlier. 2. Provisions are based on the probability of default over the life of the loan, not just at the time of default. 3. This framework is aligned with International Financial Reporting Standard 9 (IFRS 9) principles. 4. The new framework eliminates the need for any counter-cyclical provisioning buffer. Select the correct option:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 11 and 4 only
- 22 and 3 only
- 31, 2 and 3 only✓
- 42, 3 and 4 only
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1, 2 and 3 only
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