New Delhi, June 4 -- The finance ministry has asked public sector banks (PSBs) to build additional provisioning buffers against emerging stress in retail, MSME and agriculture loans, as rising early-warning accounts and uncertainty stemming from the West Asia conflict could trigger higher provisioning burdens under the proposed expected credit loss (ECL) regime, according to three people familiar with the matter.

The directive was conveyed by the department of financial services (DFS) to the chiefs of 12 PSBs in a review meeting last week, the people cited above said on condition of anonymity, as the ministry sought to strengthen monitoring and recovery efforts at PSBs to prevent these accounts from slipping into non-performing assets (N...