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BoB sees Rs 12,500 crore ECL impact; recurring credit-cost hit at 20-35 bps over five years: MD Debadatta Chand

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BoB sees Rs 12,500 crore ECL impact; recurring credit-cost hit at 20-35 bps over five years: MD Debadatta Chand

BoB sees Rs 12,500 crore ECL impact; recurring credit-cost hit at 20-35 bps over five years: MD Debadatta Chand

Bank of Baroda expects the transition to the expected credit loss framework to have a one-time capital impact of around 125 basis points, or Rs 12,500 crore, while the recurring impact on credit costs could be 20–35 basis points. The bank has already built additional provisioning buffers.

Second largest public sector lender Bank of Baroda expects the transition to the expected credit loss (ECL) framework to have a one-time impact of around 125 basis points, translating to approximately Rs 12,500 crore, while the recurring impact could increase credit costs by 20–35 basis points. The bank already has a Rs 2,500 crore floating provision created specifically for the ECL transition, which can be adjusted in accordance with regulatory guidelines, MD & CEO Debadatta Chand said during the Q2 FY27 earnings call . “Last time we said there is a one-time impact on the CRF and there is a recurring impact on the credit cost. One-time impact, last time we said it would be almost like 125 bps. That roughly translates to Rs 12,500 crore,” Chand said.

After accounting for the existing floating provision, the remaining impact over a five-year period could be around 25 basis points at best, he said. Recurring credit-cost impact The bank expects the recurring impact of the ECL transition to be in the range of 30–35 basis points on a gross basis and 20–25 basis points on a net basis.


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