Reserve Bank of India has made life a little bit easier for banks by tweaking the bad loan divergence rule. Banks’ disclosure of divergence practice mandated by RBI aims at improving transparency in asset classification and preventing under-reporting of bad loans. The central bank appears to have diluted the rule a bit without compromising the intent. It told banks to disclose divergence when the additional provisioning for NPAs assessed by RBI exceeds 10% of the reported profit before provisions and contingencies for the reference period, instead of the earlier rule of 15% of the published net profits after tax. There was no change in the second condition: the additional gross NPAs identified by RBI exceed 15% of the published incremental gross NPAs for the reference period.