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Indian Banks' Association (IBA) chief executive Sunil Mehta has said that banks have requested the Reserve Bank of India (RBI) for one more year's time to implement the system of Expected Credit Loss (ECL) for provisioning of loans. At present, banks set aside money after an asset turns bad, and once the new system is put in place, it is widely expected to have an one-time impact on banks' profits. 

Mehta stated that in the ‘worst case scenario’, the banking system is gearing up for the switch to the new system. He also said the banking sector is already geared up, few of the banks have already developed their systems (and) have got their data in place on which they can design their ECL-based risk models. He noted that the RBI has already come up with its proposed guidelines on the switch to ECL but a definite timeline is yet to be decided.

Meanwhile, IBA chief executive said that Russian investors have started investing in Indian government securities after getting a nod from the RBI for the same. He said the investment activity has come about because of the excess rupee liquidity which the Russians are saddled with due to the trade deficit with India, which is among the few countries buying oil from Russia.