abhishreshthaa
Abhijeet S
NON PERFORMING ADVANCES :
i) In terms of guidelines of RBI advances are classified as performing and non performing assets, based on recovery of principal / interest. Advances with guarantees of the Central and State Governments. Are treated as performing advances, not withstanding arrears of principal/ interest payments.
However in such cases interest, if not realized for more than 90 days, is recognized as income only on cash basis. In case the State Government guarantee is invoked and not honoured within 90 days the advance will be treated as a Non performing advance. Non performing advances are categorized as substandard, doubtful and loss assets for the purpose of provision.
ii) Advances shown in the Balance sheet are net of provisions in respect of non performing advances, interest suspense and DICGC, ECGC claims received.
iii) Provisions on standard advances are shown under OTHER LIABILITIES AND PROVISIONS
iv) Provisions on advances is made as per RBI guidelines as under
a) Standard assets 0.25% of the outstanding advances.
b) Sub standard assets 10% of the outstanding advances.
c) Doubtful assets =
1) 20% to 50% of the secured portion of advances, depending upon the period for which the asset has remained doubtful and;
2) 100% of the unsecured portion of the outstanding advance after netting realized / realizable amount in respect of DICGC claims made upto the date of opting out of the schemes and realized / realizable amount of guarantee cover under the ECGC /CGSTI schemes.
d) Loss Assets 100% of the outstanding adavances.
i) In terms of guidelines of RBI advances are classified as performing and non performing assets, based on recovery of principal / interest. Advances with guarantees of the Central and State Governments. Are treated as performing advances, not withstanding arrears of principal/ interest payments.
However in such cases interest, if not realized for more than 90 days, is recognized as income only on cash basis. In case the State Government guarantee is invoked and not honoured within 90 days the advance will be treated as a Non performing advance. Non performing advances are categorized as substandard, doubtful and loss assets for the purpose of provision.
ii) Advances shown in the Balance sheet are net of provisions in respect of non performing advances, interest suspense and DICGC, ECGC claims received.
iii) Provisions on standard advances are shown under OTHER LIABILITIES AND PROVISIONS
iv) Provisions on advances is made as per RBI guidelines as under
a) Standard assets 0.25% of the outstanding advances.
b) Sub standard assets 10% of the outstanding advances.
c) Doubtful assets =
1) 20% to 50% of the secured portion of advances, depending upon the period for which the asset has remained doubtful and;
2) 100% of the unsecured portion of the outstanding advance after netting realized / realizable amount in respect of DICGC claims made upto the date of opting out of the schemes and realized / realizable amount of guarantee cover under the ECGC /CGSTI schemes.
d) Loss Assets 100% of the outstanding adavances.