15 April 2012
Banks need to provide for bad and doubtful debts on all advances - be it standard, sub-standard, doubtful or loss. Then when do banks book BAD DEBTS? When is the auditor suppose to certify BAD DEBTS in case of Banks and/or co-operative societies?
15 April 2012
Bank will review the provision of NPA (i.e. bad debts as you said) every year and those assets which are bad debts are classified in loss assets and 100% provision will provided for.
These assets are shown in balance sheet for specified period and written off only after the prescibed time and procedure. hence bad dents will still shown in assets and 100% provisions will made.
As auditor is certifying the balance sheet of bank/ society every figure including provisioning and asset should be correct.
15 April 2012
Thanks. Can you please tell me the 'specified period'?
Also, it is mentioned in the co-operative societies act that unless the auditor certifies the Bad Debt, the society/ co-operative bank cannot book the debt as bad.. Please clarify.
17 April 2012
Sir, in your first reply, you mentioned that the NPA's are shown in the balance sheet for a specified period and then written off after such period. Is the specified period decided by the bank/society?
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