Is loan given by Banks for more than 3Yrs whether secured or unsecured to any asset should be provided as 100% provision ?
What if loan is for 1yrs / 2 yrs ?
Is Banking Regulation Act , has made it mandatory to make provision in book of A/C's?
2 Replies
praveen
(Chartered Accountant)
(6971 Points)
Replied 15 June 2010
Every loan if is non performing has to be provided with a provision. The extent of it depends on the below link's.
Check this link out
https://ezeetax.wordpress.com/2010/04/01/npa-chart/
PRATEEK
(ACA)
(102 Points)
Replied 15 June 2010
IF AN ASSET IS NON PERFORMING ASSET THEN IN CASE OF UNSECURED LOAN THE PROVISION IS TO CREATED @ 100%
IN CASE OF SECURED LOAN
STANDARD = .40%(for 1 year once declared as a non performing asset)
SUB STANDARD = 10%
DOUBTFUL ASSET
UPTO 1 YEAR =20%
FROM 1 TO 3 YEARS =30%
MORE THEN 3 YEARS = 100%
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