New Delhi, May 4 -- The Reserve Bank of India's (RBI) final guidelines on shifting to an expected credit loss (ECL) framework are likely to result in a one-time net impact of up to 120 basis points (bps)on banks' Common Equity Tier-1 (CET-1) ratios, according to Crisil Ratings.

However, banks will be allowed to spread this impact over four financial years, reducing the immediate burden. Additional provisioning buffers already maintained by lenders could further soften the effect.

Strong Capital Buffers to Absorb Transition

In a press release, the ratings agency noted that despite the capital impact, banks' overall credit profiles are expected to remain stable, supported by strong capitalisation levels. The banking system's CET-1 ratio ...