Classification as NPA

Term Loan – If Interest and/ or installment of principal remain overdue for a period of more than 90 days
CC/Overdraft – if the account remains ‘out of order or the limit is not renewed/reviewed within 180 days from the due date of renewal. Out of order means an account where
(i) the balance is continuously more than the sanctioned limit or drawing power OR
(ii) where as on the date of Balance Sheet, there is no credit in the account continuously for 90 days or credit is less than interest debited OR
(iii) where stock statement not received for 3months or more.
Bills – If the bill remains overdue for a period of more than 90 days from due date of payment
Agricultural accounts ? (i) if loan has been granted for short duration crop: interest and/or installment of principal remains overdue for two crop seasons beyond the due date.
(ii) if loan has been granted for long duration crop: interest and/or installment of principal remains overdue for one crop season beyond due date.
Decision about crop duration to be taken by SLBC.
Loan against FD, – Advances against term deposits, NSCs eligible for surrender, IVPs,
NSC, KVP, LIP KVPs and life policies not treated as NPAs provided sufficient margin is available.
Advances against gold ornaments, govt securities and all other securities are not covered by this exemption.
Loan guaranteed – Loan guaranteed by Central Govt not treated as NPA for asset
by Government classification and provisioning till the Government repudiates its guarantee when invoked. Treated as NPA for income recognition.
Consortium advances – Asset classification of accounts under consortium should be based on the record of recovery of the individual member banks.

Accounting & Finance for Banking

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