Rate of the provision of NPA

This query is : Resolved 
 

(Querist) 16 September 2008

what is the rate of the provision of NPA,Sub-standard assets,standard assets ??


Taxguy (Expert) 16 September 2008

PROVISIONS ON ASSETS:
1) STANDARD ASSETS:
General Provision as follows:
A) On direct advances to Agriculture and SME - 0.25%
B) Residential Housing loans beyond Rs.20 lakhs – 1%
C) Specific sector advance like personal loans, Credit Card dues, Loan on Capital Market instrument commercial Real estate Loans & NBFC. - 2%
D) All Other advances - 0.40%
Provision on Standard Assets should not be netted from Gross Advance but shown separately as provision and should not be taken for arriving Net NPA.
2) SUB STANDARD ASSETS:
General provision 10% on Out Standing amount irrespective of security coverage. Unsecured provision additional 10% , if tangible securities are less than 10% of loan ( ab-Initio.) at the time of advance.

Vincent Jose (Querist) 17 September 2008

thank 4 helping me



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