This assumption was based on the fact that restructurings have taken place only in the recent past with long moratorium and repayment holidays and the repayment behaviour of such borrowers is still not known. In view of the above, the working group recommended a higher general provisioning requirement on restructured standard assets i.e., from the existing 2% to 5%.
This is based on a more synchonised and more sustained economic recovery in the advanced economies, a more positive (albeit still a challenging) domestic economic growth outlook, as well as improved levels of confidence domestically following positive political developments and ratings outcomes.