Npa provision

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My query is if bank have given loan to purchase car for rs. 6,00,000 on 15 /12 /12 but the borrower have income frm agriculture and there are 5 instalment of rs. 1,20,000 excluding interest a6nd amount is overdue on 31.12 13 for 1,39,000 and only 96,000 are only recovered till 31.3.14 then account will be NPA?? If yes then why? and if no then why? please answer as soon as possible its urgent.Thanking u in advance
Replies (16)
  • Interest and/or installment of principal remain overdue for a period of more than 90 days in respect of a term ,loan
  • The account remains ‘out of order’ for a period of more than 90 days, in respect of an Overdraft/Cash Credit (OD/CC),
  • The bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted,
  • Interest and/or installment of principal remains overdue for two harvest seasons but for a period not exceeding two half years in the case of an advance granted for agricultural purposes, and
  • Any amount to be received remains overdue for a period of more than 90 days in respect of other accounts.
  • Non submission of Stock Statements for 3 Continuous Quarters in case of Cash Credit Facility.
  • No active transactions in the account (Cash Credit/Over Draft/EPC/PCFC) for more than 90 days
  • The bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted,
  • Interest and/or installment of principal remains overdue for two harvest seasons but for a period not exceeding two half years in the case of an advance granted for agricultural purposes, and
  • Any amount to be received remains overdue for a period of more than 90 days in respect of other accounts.
  • Non submission of Stock Statements for 3 Continuous Quarters in case of Cash Credit Facility.
  • No active transactions in the account (Cash Credit/Over Draft/EPC/PCFC) for more than 90 days

 

So As per ur qustion loan was taken for purchase of Car on 31.12.2012 and payments was due on 31.3.2013. was of Rs.139000/- there may  ineterpretation

1. installment was being paid but not by the full amount of installment i.e 1.2 Lacs or

2. The due amount is for instrest.

3. there is quarterly installment payments where due amount is inlcuding interest is of rs. 139000.00

For NPA

1. No NPA shall be classified bcs partment is being made out of due amount.

2. Still not be classified as NPA bcs ..the term on 90 days does not completed on 31.3.2013....Due persion shall be counted from 1.2.2013 in case of monthlyu installment or in case of quaterly installment it shall be counted from 1.4.2013.

3. the account shall be NPA on 30.6.2013. and amount so recovered shall be recognised as income either from on account of Interest or installment.

 

Instalment is not quarterly but it is yearly and loan is taken on 15.12.12 so 1st instalment was due on 15.12.13 but till 31.3.14 only rs. 96000 are recovered so according to me a/c will be npa. So whether my point is right?

Mam i have make sure first that from on which date it was recovered. if it is recovered after 15th march 2014 then it must be classified as NPA if not then then it shall not be NPA.

Actually instalment excluding interst is 120000 but but only 96000 is recovered till 31 march 14, so as all overdue amt on 15.12.13 rs.139000 which is not recovered till 31 mar 14 then account ll be npa

As far as concern with due amount is 139000 its oky but for classification we have to ensure that no amount was recovered before 15.3.2014. either in form of installment or interest,

It means if instalment and interest is totally overdue for 90 days then only we should classify that account as npa

Intallment or Interest anoy of one....if due for 90 days then it shall be classify as NPA

In part or totally overdue ??

Any amount if overdue for 90 days....then.

Then it is overdue as instalment is due on 15.12.13 but it is not fully paid till 15.3.14 then it ll be npa bcz within 90 days instalment in not paid fully
So according to me bank should classify itas substandard asset

Its Bank judgement whether it shall be standard or substandard.....if u have any more query plz come on live chat at my gamil id...at sarojkumar @ icai.org....

so that i can resolved ur query quickly.

We are statutory audit so we hav to report abt it in our audit report

Is it a agricultural advance???

If is it a agricultural advance, then u have to consider crop season for making it as NPA../


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