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CAIIB BFM CASE STUDY ON NPA part 1

IMPORTANT CASE STUDIES ON NPA – PART-1 | PRACTISE FOR CAIIB CASE STUDIES FOR CAIIB BFM PAPERS

 

We hereby are providing the CAIIB Case studies on the Non-Performing Assets which is considered one of the most important & scoring topics from the applicable syllabus of BFM Exams 2022. You can read the exam & registration dates of BFM November Attempt then you can visit our page here.

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Now about the main thing, we will provide you some case studies on the concept of NPA from our material that will test your understanding of the NPA norms. But before we can begin with those, we would like to get your attention on the CAIIB study material 2022 made available especially for upcoming exams.

important topic: CAIIB classes schedule for nov 2022

The BFM study material contains video lectures including the case studies and much more. Here is the highlight of the CAIIB BFM Study Material or full course:

 

  • Conceptual Coverage of all concepts
  • Case studies of BFM with detailed explanations
  • BFM Mock tests 2022 which can be reviewed later on
  • BFM study Notes in soft form (epdfs)
  • Accessibility through mobile and desktops
  • Online accessibility of Materials
  • Coverage of BFM latest Syllabus for November 2022 Exams
  • Latest exam pattern & applicable BFM syllabus 2022

 

To access the material you can visit our website: iibf.info or download our mobile apps: IIBF Learning Center. 

 

You can also Direct Message us with your name & Course to know more about the course at this Number: 8360944207

 

BFM CASE STUDIES ON NPA FOR CAIIB EXAM 2022

 

NPA – BFM CASE STUDY 1:

 

International Banks provided following information about its-NPA account as on Mar 31, 2012.

PARTICULARS AMOUNT
Total loans Rs. 40000 cr.
Standard accounts 

(includes direct agriculture & SME loans = Rs. 10000 cr.)

Rs. 38000 cr.
Sub-standard 

(of which unsecured sub-standard = Rs. 200 cr.)

Rs. 800 cr.
Doubtful up to 1 year  Rs. 800 cr.
Doubtful 1 year to 3 years  Rs. 200 cr.
Doubtful above 3 years  Rs. 120 cr.
Loss accounts  Rs. 80 cr.
All doubtful loans are fully secured.

 

Q-01 Calculate the amount of provision on standard accounts:

  • Rs. 25 cr. 
  • Rs. 112 cr.
  • Rs. 137 cr. 
  • Rs. 151 cr.

 

Q-02 Calculate the amount of provision on sub-standard loan accounts:

  • Rs. 120 cr. 
  • Rs. 140 cr.
  • Rs. 160 cr. 
  • Rs. 240 cr.

 

Q-03 Calculate the amount of provision on doubtful loan accounts:

  • Rs. 400 cr. 
  • Rs. 340 cr.
  • Rs. 320 cr. 
  • Rs. 260 cr.

 

Q-04 Calculate the total provision on NPA loan:

  • Rs. 420 cr. 
  • Rs. 560 cr.
  • Rs. 580 cr. 
  • Rs. 620 cr.

 

Q-05 Calculate the total provision on standard and NPA loans:

  • Rs. 813 cr. 
  • Rs. 757 cr.
  • Rs. 689 cr. 
  • Rs. 716 cr.

 

Q-06 Calculate the provision coverage ratio of the bank:

  • 78.50% 
  • 30.80%
  • 31.00% 
  • 34.10%

 

Q-07 If the security value in secured sub-standard accounts = Rs. 500 cr., calculate amount of the provision on sub-standard accounts:

  • Rs. 90 cr. 
  • Rs. 85 cr
  • Rs. 80 cr. 
  • Rs. 75 cr

 

Q-08 If security value in DF-1 category accounts = Rs. 600 cr., calculate amount of provision for OF-1 category accounts:

  • Rs. 800 cr. 
  • Rs. 600 cr
  • Rs. 350 cr. 
  • Rs. 190 cr

 

Q-09 If security value = Rs. 150 cr. in DF-2 accounts, calculate amount of the provision.

  • Rs. 110 cr. 
  • Rs. 95 cr.
  • Rs. 80 cr. 
  • Rs. 75 cr.

 

Q-10 Calculate the %age of gross NPA:

  • 8.00% 
  • 6.00%
  • 5.00% 
  • 4.00%

 

Q-11 Calculate the amount of net NPA:

  • Rs. 2000 cr. 
  • Rs. 1380 cr.
  • Rs. 1170 cr. 
  • Rs. 1080 cr.

 

Q-12 Calculate the %age of net NPA:

  • 3.29% 
  • 3.41%
  • 3.50% 
  • 4.01%

 

Answers of NPA – BFM Case study 1:

 

1-III 

2-II 

3-I 

4-IV 

5-II 

6-III 

7-I 

8-III 

9-I 

10-III 

11-II 

12-III

 

Explanation of Answers of BFM Case study 1:

 

1: Provision on general accounts = Rs. 28000 x 0.40% = Rs. 112 cr. 

Add: Provision on direct agriculture and SME accounts = Rs. 10000 x 0.25% = Rs. 25 cr. 

Total amount of provision = Rs. 112 + 25 = Rs. 137 cr.

 

2: Secured sub-standard accounts = Rs. 600 x 15% = Rs. 90 cr. 

Add: Unsecured sub-standard = Rs. 200 x 25% = Rs. 50cr. 

Total provision = Rs. 140 cr.

 

3: DF-1 = Rs. 800 x 25% = Rs. 200 

Add: DF-2 = Rs. 200 x 40% = Rs. 80 cr. 

Add: DF-3 = Rs. 120 x 100% = 120 cr. 

Total provision = Rs. 200 + Rs. 80 + Rs. 120 = Rs. 400 cr.

 

4: Sub-standard = Rs. 140 

Add: DF = Rs. 400 

Add: Rs. loss accounts = 80 cr. 

Total Provision = Rs. 140 + Rs. 400 + Rs. 80 = Rs. 620 cr.

 

5: Standard accounts = Rs. 137 cr. 

Add: NPA loans = Rs. 620 cr. 

Total provision = Rs. 137 cr. + Rs. 620 cr. = Rs. 757 cr.

 

6: 620 / 2000 x 100 = 37.9%

 

7: In case of secured sub-standard accounts- secured & unsecured balance is not to be differentiated for calculation of provisions. 

Therefore, the provision = Rs. 600 x 15% = Rs. 90 cr.

 

8: Provision on secured portion =25% and on unsecured portion = 100%. 

Therefore, the provision:

Secured accounts = Rs. 600 x 25% = Rs. 150 cr.

Add: Unsecured accounts = Rs. 200 x 100 = Rs. 200 cr.

Total provision = Rs. 150 + Rs. 200 = Rs. 350 cr.

 

9: On Secured portion = 40% and on unsecured portion = 100%

Secured accounts = Rs. 150 x 40 = Rs. 60 cr. 

Add: Unsecured accounts = Rs. 50 x 100 = Rs. 50 cr. 

Total provision = Rs. 60 + Rs. 50 = Rs. 110 cr.

 

10: Gross NPA %age = 2000 / 40000 x 100 = 5%

 

11: Gross NPAs – provision = Rs. 2000 cr. – Rs. 620 cr. = Rs. 1380 cr.

 

12: Net advances = Rs. 70000 – Rs. 60 = Rs. 39380. 

Net NPA = 1380. 

NPA %age = 1380 / 39380 x 100 = 3.5%

You can also find the BFM case studies on Non Performing Assets by visiting our official site. We will be publishing the next set of case studies on NPA soon. Till then practice this one & solve it by hand.

 

All the best for you CAIIB Exams!

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