All non banking finance companies (NBFCs) have been asked by Reserve Bank of India to make provision of 0.25% on standard assets. So far the NBFCs had to make provisions only for non performing assets.

"In the interests of counter cyclicality and so as to ensure that NBFCs create a financial buffer to protect them from the effect of economic downturns, it has been decided to introduce provisioning for standard assets also", RBI said.

According to RBI, the provisioning made on standard assets would act to arrive at net NPAs. Clarifying the treatment of the provisioning, the apex bank said that this provision need not be netted off from gross advances.

It can in fact be shown as contingent provisions in balance sheet under the heading 'standard assets.'