The circular specifies the following minimum provisions for all loans.
| Classification | Criteria | Provision |
| Normal | All information available assures repayment as agreed | General Provision. |
| Watch-list | Some weakness in the borrower’s financial position and credit worthiness that requires more than normal attention. | General Provision. |
| Sub -standard loans | Payment of principal is in arrears beyond 90 days or some loss is possible due to adverse factors. | Specific Provision Minimum 25% of the net exposure amount |
| Doubtful loans | Full recovery seems doubtful based on the available information, leading to a loss or part of these loans. | Specific Provision Minimum 50% of the net exposure amount |
| Loss loans | Possibility of no recovery at all after the bank has exhausted all available courses of action | Specific Provision Minimum 100% of the net exposure amount |
It should be noted that for corporate and commercial loans doubtful and loss categories should be determined on a principle basis and not necessarily on a rule, such as number of days delinquent. Provisions for retail exposures should be fully rule based.