What changed
The revised Master Circular updates the previous version dated April 2, 2024, by incorporating all IRAC-related instructions issued up to March 31, 2025. It includes a list of consolidated circulars in Annex 5. No new instructions or guidelines have been added; it is purely a consolidation exercise.
What it means for you
Banks now have a single, updated reference document for IRAC norms, reducing the need to track multiple circulars. This consolidation ensures consistency in income recognition, asset classification, and provisioning practices across commercial banks (excluding RRBs). Lenders should use this circular as the authoritative source for compliance and audit purposes.
What you must do
- Replace the previous Master Circular (dated April 2, 2024) with this updated version for all IRAC-related compliance.
- Review Annex 5 to identify any circulars issued between April 1, 2024, and March 31, 2025, that are now consolidated.
- Update internal policy documents, training materials, and system parameters to reflect the consolidated norms.
- Ensure that NPA classification, provisioning, and income recognition processes align with the revised circular.
Who it affects
All commercial banks (excluding Regional Rural Banks), Credit risk and compliance departments, Internal audit and loan review teams, Branch managers handling advances
Does this Master Circular introduce any new IRAC norms?
No, it only consolidates all existing instructions issued up to March 31, 2025. No new guidelines have been added.
Which banks are covered under this circular?
All commercial banks except Regional Rural Banks (RRBs) are required to follow these prudential norms.
What is the effective date of this Master Circular?
The circular is dated April 1, 2025, and supersedes the previous version dated April 2, 2024.