The document discusses non-performing assets (NPAs) for banks. It defines NPAs as loans where interest or principal payments are overdue for more than 90 days. It also lists ways for banks to tackle NPAs, such as rescheduling loans, loan rehabilitation, and loan transfers. The document concludes by covering provisioning requirements for NPAs, where higher provisions are required for loans with longer default periods, and describing different types of letters of credit used in foreign trade.

1. Amity Business School MBA Class of 2010, Semester IV Strategic Financial Management Prof Akhil Swami/Anuj Srivastava

2. Non performing Assets When asset ceases to generate income for bank

3. What are NPA Interest and or installment of principal remains overdue for a period of more than 90 days. The account remains out of order in respect of overdraft, cash credit, The bills remains overdue for period of more than 90 days in the case of bills purchased. Loan Granted to short duration crop will be treated as NPA ,if the installment of principal or interest remains overdue for 2 crop seasons. 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.

4. Asset Classification Substandard asset. Doubtful asset. Loss asset.

5. How to tackle NPA Reschedulement of Loan . Rehabilitation of Loan. Management Transfer. One time settlement. Taking over the unit and selling the asset. Loan transfer to Asset reconstruction co.

6. Provisioning for NPA Standard----------.25%, default less than 90 days Substandard------10%,default more than 90 days and less than 12 months. D-1------------------20%, default up to (15+12months)27months D-2------------------30% , default up to 51(27+24)months D-3and loss--------100% ,default more than 51 months

7. Types of LC Revocable LC-----may be canceled or amended, rare. Irrevocable LC----Most commonly used in Foreign trade. Cannot be revoked. Revolving LC----Can revolve in relation to time and value would stipulate certain ceiling in addition to date of expiry. Transferable LC Red clause LC---Payment in advance for purchasing/packing processing. Written in red ink.