NPA DATE from RBI GUIDE LINES
KIRAN KOTHARI
(Querist) 01 June 2008
This query is : Resolved
If concern A borrow fund from Urban Co-op.Bank on 1-04-1994 Rs.50lacs and become NPA(in the books of bank) on 3-03-1995.Thereafter,that Bank grant new loans to associate concern B on 26-03-1997 Rs.100lacs and out of that debt of A Rs.87lacs were deposited and account was closed.Now B has been NPA(in the Books of Bank) on 30-06-1998.
question:
what is NPA date for B as per RBI guide line and what about interest payments in the accounts A out new borroings?
Rajesh Sharma
(Expert) 02 June 2008
Dear Ms. Kiran
As per RBI Guidelines, account of any concern can be declared NPA by the banks when no amount (interest/principle) is deposited by the borrower in its account for the last 90 days. Earlier it was 180 days. As far as the account of A in your query is concerned, since the amount of Rs.87 lacs have been deposited, it has to be reclassified by the bank as a "STANDARD ACCOUNT". For your knowledge plese go through the RBI guidelines of 2007 contained in master circular called "PRUDENTIAL NORMS ON ASSET CLASSIFICATION & PROVISIONING". The same is available on the website of RBI at www.rbi.gov.in in archives section.
Regards
Rajesh Sharma
Advocate
