Mumbai, May 30: To impart greater transparency, the Reserve Bank of India (RBI) has asked commercial banks to disclose their provisions by categories. The RBI feels the procedure will also offer a better understanding of a bank’s balance sheet.

The move is part of a sustained effort by the RBI to bring greater clarity in the activities of banks. In recent years, it has issued periodic circulars on disclosures in the notes on account to the balance sheets of banks.

A master circular issued earlier this year asked banks to disclose provisions both for the current year and the previous year under categories such as asset quality, investments and miscellaneous items. The provisions relate to non-performing assets (NPAs), standard assets, depreciation in the value of investments, income tax and others.

On Monday, the RBI issued a notification seeking disclosures in the notes on account on the breakup of provisions and contingencies under the head of expenditure in the profit and loss account.

Banks will now have to disclose the provisions for depreciation on investment both for the current year and previous year apart from provisions towards NPAs, standard asset, income tax and other provisions and contingencies.

The RBI said this would enable quick comprehension of the financial statements apart from making available at one place information on all provisions and contingencies.

The RBI’s drive towards greater clarity has extended beyond the balance sheets of banks. Earlier this month, it asked banks to put all their charges and penalties in the public domain by May 31. Banks will have to reveal the charges on savings account services like penalty for not maintaining minimum balance, fees on ATM transactions and credit and debit card charges.

In addition, banks will have to show charges relating to savings bank accounts in their branches as well. The ruling comes following complaints of banks imposing unreasonable and shadowy service charges on their customers.