Regulator, Reserve Bank of India has softened the provisioning norms for banks. The relaxed norms would come into effect for all books of accounts with effect from September 30, 2010.

Thus, banks would now be required to maintain the provision coverage ratio of 70% of gross NPAs only till September 10, 2010.

The norm for additional provision coverage of 70% to be maintained by banks was given out by RBI in December 2009.

The apex bank has now directed banks that the additional amount that they accumulated in all this time under this provision should be kept aside in a separate account called counter cyclical provision buffer.

It also said that most of the banks have achieved this 70% provision target.