Non performing assets in Banks

Non performing assets in Banks

• 2.
  NPAs.. A NPA isa loan or an advance where; Interest and/ or installment of principal remain overdue for a period of more than 90 days in respect of a term loan, The account remains “out of order” in respect of an overdraft/ cash credit The bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted The installment or interest remains overdue for two crop seasons in case of short duration crops and for one crop season in case of long duration crops
• 3.
  CATEGORIES OF NPA.. SubstandardAssets–Which has remained NPA for a period less than or equal to 12 months. Doubtful Assets – Which has remained in the sub-standard category for a period of 12 months (mainly up to 3 years). Loss Assets – where loss has been identified by the bank or internal or external auditors or the RBI inspection but the amount has not been written off wholly.
• 4.
  PROVISIONING NORMS byRBI  Standard Assets – general provision of a minimum of 0.25%  Substandard Assets – 10% on total outstanding balance, 10 % on unsecured exposures identified as sub-standard.  Doubtful Assets – 100% to the extent advance not covered by realizable value of security. In case of secured portion, provision may be made in the range of 20% to 100% depending on the period of asset remaining sub- standard  Loss Assets – 100% of the outstanding  Debt Recovery Tribunal(DRT)  Enforcement Of Security Interest Act 2002(SRFAESI)
• 5.
  Gross And NETNPA • The gross NPA for the year ended 31st march 2011 is Rs.25,326.29(in thousands) • The movement of Net NPA for the year is Rs.12346.90(in thousands), • The movement of Provisions for NPA is Rs.12979.39(in thousands). • The provisioning covering ratio of the bank on 31st March,2011 is 64.95%.