RBI has directed banks that the exercise of verification of asset classification and income recognition should be done as part of the audit work by the branch and statutory Auditors work by the branch and statutory Auditors effective from the year ending

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	31st March 1993
B	31st March 1994
C	31st March 1995
D	31st March 1996

Explanation:

Detailed explanation-1: -Paragraph 10 of the Circular stipulates that loan accounts classified as NPAs may be upgraded as ‘standard’ asset only if entire arrears of interest and principal are paid by the borrower. NBFCs shall have time till September 30, 2022 to put in place the necessary systems to implement this provision.

Detailed explanation-2: -A loss asset is one 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.

Detailed explanation-3: -If the assets are permitted to remain in the books for any reason, 100 per cent of the outstanding should be provided for. (a) Provision should be 100 per cent of the extent to which the advance is not covered by the realisable value of the security to which the bank has a valid recourse.

Detailed explanation-4: -’System-based asset classification’ would mean asset classification (downgrading as well as upgrading) carried out by the CBS / computerized systems of the bank in an automated manner on an ongoing basis, based on the relevant RBI instructions/guidelines.

There is 1 question to complete.