Bank audit

I vaguely remember that the debit of interest (if that alone is the cause for excess drawl) should not be treated as NPA.

There is some circular to this effect from RBI.

kkm

what ever bank debits to c/c a/c as interest , generally it is debited through day end process so it is known to custemers on next day so it is not expected that a/c holder should pay in advance in anticipation of the expected debits.So NPA marking will be on the basis of banking practice of allowing some reasonable time of 10/15 days for the repayment of interest RBI master circular is very clear on the point.

If the credits during the March quarter is less than the interest charged during that quarter, then that account has to be classified as NPA