Mumbai, May 1 -- Reserve Bank of India's (RBI) proposed shift to an expected credit loss (ECL) framework could lead to a one-time net impact of up to 120 basis points (bps) on banks' Common Equity Tier-1 (CET-1) ratios, though the overall credit profiles of lenders are expected to remain stable says Crisil Ratings.

In a press release, Crisil said banks would be allowed to spread the impact over four financial years, while additional provisioning buffers could further mitigate the hit. Given the sector's strong capitalisation, the transition is unlikely to materially affect banks' credit strength.

The RBI's directions introduce a three-stage asset classification system based on probability of default, loss given default and exposure at d...