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Amity Business School MBA Class of 2010, Semester IV Strategic Financial Management Prof Akhil Swami/Anuj Srivastava
Non performing Assets When asset ceases to generate income for bank
What are NPA <ul><li>Interest and or installment of principal remains overdue for a period of more than 90 days. </li></ul...
Asset  Classification <ul><li>Substandard asset. </li></ul><ul><li>Doubtful asset. </li></ul><ul><li>Loss asset. </li></ul>
How to tackle NPA <ul><li>Reschedulement of Loan . </li></ul><ul><li>Rehabilitation of Loan. </li></ul><ul><li>Management ...
Provisioning for NPA <ul><li>Standard----------.25%, default less than 90 days </li></ul><ul><li>Substandard------10%,defa...
Types of LC <ul><li>Revocable LC-----may be canceled or amended, rare. </li></ul><ul><li>Irrevocable LC----Most commonly u...
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6a3c4 Npa

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  • Transcript of "6a3c4 Npa"

    1. 1. Amity Business School MBA Class of 2010, Semester IV Strategic Financial Management Prof Akhil Swami/Anuj Srivastava
    2. 2. Non performing Assets When asset ceases to generate income for bank
    3. 3. What are NPA <ul><li>Interest and or installment of principal remains overdue for a period of more than 90 days. </li></ul><ul><li>The account remains out of order in respect of overdraft, cash credit, </li></ul><ul><li>The bills remains overdue for period of more than 90 days in the case of bills purchased. </li></ul><ul><li>Loan Granted to short duration crop will be treated as NPA ,if the installment of principal or interest remains overdue for 2 crop seasons. </li></ul><ul><li>A loan granted to long term crop will be treated as NPA if the installment of Principal or interest remains overdue for one crop season. </li></ul>
    4. 4. Asset Classification <ul><li>Substandard asset. </li></ul><ul><li>Doubtful asset. </li></ul><ul><li>Loss asset. </li></ul>
    5. 5. How to tackle NPA <ul><li>Reschedulement of Loan . </li></ul><ul><li>Rehabilitation of Loan. </li></ul><ul><li>Management Transfer. </li></ul><ul><li>One time settlement. </li></ul><ul><li>Taking over the unit and selling the asset. </li></ul><ul><li>Loan transfer to Asset reconstruction co. </li></ul>
    6. 6. Provisioning for NPA <ul><li>Standard----------.25%, default less than 90 days </li></ul><ul><li>Substandard------10%,default more than 90 days and less than 12 months. </li></ul><ul><li>D-1------------------20%, default up to (15+12months)27months </li></ul><ul><li>D-2------------------30% , default up to 51(27+24)months </li></ul><ul><li>D-3and loss--------100% ,default more than 51 months </li></ul>
    7. 7. Types of LC <ul><li>Revocable LC-----may be canceled or amended, rare. </li></ul><ul><li>Irrevocable LC----Most commonly used in Foreign trade. Cannot be revoked. </li></ul><ul><li>Revolving LC----Can revolve in relation to time and value would stipulate certain ceiling in addition to date of expiry. </li></ul><ul><li>Transferable LC </li></ul><ul><li>Red clause LC---Payment in advance for purchasing/packing processing. Written in red ink. </li></ul>
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