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Bank audit

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Querist : Anonymous

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Querist : Anonymous (Querist)
21 April 2014 1. The borrower group is habitually diverting the funds arranged under one entity to the proprietor or to the other related entities disregarding the conditions of the sanction.
2. The repayments under one credit facility have been made by using the borrowed funds under the other facility/entity.



Q. On the basis of diversion of fund Account is NPA ?

pls reply (brijkishor@vkgc.com)

Thanks
Brij
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Nikhil Kaushik

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Nikhil Kaushik (Expert)
21 April 2014 i dont think u can mark an account NPA for diversion of funds as long as the repayment/servicing is taking place properly.

however, if you believe it to be a fraud, you have the option of straightaway declaring it as a loss asset under para 4.2.9 of the master circular (subject to satisfaction of other conditions provided therein) on IRAC norms
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