Suppose, If the account is classified as NPA since February month due to non payment of Principal. As per the Revenue Recognition policy of the Bank, interest from NPA Account is not recognised by the Bank as an Interest Outstanding from the account. If, on 30 Th March, some amount of the principal instalment say Rs. 300 out of 1000 is deposited into account. In this case, whether that account needs to be regularised i.e. Upgradation of NPA?
As per RBI norms, yes it has to be upgraded, however, it must not be on account of window dressing being end of year and there must be actual realization else the same will only result in qualification of audit report afterwards.
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