Prudential Norms on Income Recognition, Asset Classification, and Provisioning pertaining to Advances - Computation of NPA Levels - ആർബിഐ - Reserve Bank of India
Prudential Norms on Income Recognition, Asset Classification, and Provisioning pertaining to Advances - Computation of NPA Levels
RBI/2009-10/168 September 24, 2009 The Chairman and Managing Directors / Chief Executive officers Dear Sir, Prudential Norms on Income Recognition, Asset Classification, and Provisioning pertaining to Advances - Computation of NPA Levels Please refer to paragraphs 3.2, 3.4, and 3.5 of our Master Circular DBOD.No. BP.BC. 17/21.04.048/2009-10 dated July 1, 2009 on the captioned subject. 2. It has been observed that banks follow different methods to compute and report Gross and Net Advances, and Gross and Net NPAs. While, on an account turning NPA, some banks reverse the interest already charged, and stop further interest application, others prefer to make provisions in lieu of interest already credited to Profit and Loss account, and continue to debit interest, though it is credited to Interest Suspense account instead of to Profit and Loss account. While all the aforesaid methods in substance are the same, there is a need for uniformity across banks in reporting of Advances and NPAs, so as to avoid any scope for different interpretations by the auditors/public, as also to improve the comparability of Advances position of banks. 3. Therefore, in consultation with Indian Banks’ Association, it has been decided that:
4. Banks are, therefore, advised to compute their Gross Advances, Net Advances, Gross NPAs and Net NPAs, as per the annexed format with immediate effect. Yours faithfully (B. Mahapatra) PART A Details of Gross Advances, Gross NPAs, Net Advances and Net NPAs
(Rs. in crores up to two decimals)
PART B Supplementary Details
(Rs. in crores up to two decimals)
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