:: Home Page            
 Advertise your Business Here     
Browse  |   Placement Papers  |   Company  |   Code Snippets  |   Certifications  |   Visa Questions
Post Question  |   Post Answer  |   My Panel  |   Search  |   Articles  |   Topics  |   ERRORS new
   Refer this Site  Refer This Site to Your Friends  Site Map  Bookmark this Site  Set it as your HomePage  Contact Us     Login  |  Sign Up                      
Categories >> Accounting >> Audit


 Audit interview questions  Audit Interview Questions (428)
 CompanyAffairs CS interview questions  CompanyAffairs CS Interview Questions (159)
 Taxation interview questions  Taxation Interview Questions (1915)
 Accounting General interview questions  Accounting General Interview Questions (2843)
 Accounting AllOther interview questions  Accounting AllOther Interview Questions (4376)
How can manage (Recover and Reduce)NPA in Banking Sector?
 Question Submitted By :: Audit
I also faced this Question!!     Answer Posted By  
# 1
An asset becomes non-performing when it ceases to generate
income for the bank. Earlier an asset was considered as non-
performing asset (NPA) based on the concept of 'Past Due'.
A ‘non performing asset’ (NPA) was defined as credit in
respect of which interest and/ or installment of principal
has remained ‘past due’ for a specific period of time. With
a view to moving towards international best practices and
to ensure greater transparency, '90 days' overdue* norms
for identification of NPAs have been made applicable from
the year ended March 31, 2004. Therefore afterward Non-
performing asset shall be a loan or an advance where:
(i) Interest and/or installment of principal remain
overdue for a period of more than 90 days in respect of a
Term Loan.
(ii) The account remains 'Out of order'@ for a period of
more than 90 days, in respect of an Overdraft/ Cash Credit
(iii) The bill remains overdue for a period of more than
90 days in the case of bills purchased and discounted,
(iv) Any amount to be received remains overdue for a
period of more than 90 days in respect of other accounts.
* Any amount due to the bank under any credit facility, if
not paid by the due date fixed by the bank becomes overdue.
@ “An account should be treated as 'out of order' if the
outstanding balance remains continuously in excess of the
sanctioned limit/drawing power. In cases where the
outstanding balance in the principal operating account is
less than the sanctioned limit/drawing power, but there are
no credits continuously for 90 days or credits are not
enough to cover the interest debited during the same
period, these accounts should be treated as 'out of
NPA is part of the operational risk of the banking
industry. NPA can be reduced and managed a certain level by
a prudential banker. Before account turn NPA its give
signals, which type of accounts should be categarised as
Special Mentioned Account (SMA) and treatment should be
given accordingly:
(i) The account should be categarised as SMA 1 if
overdue remains for 30 days & SMA 2 if remains overdue more
than 30 days to 89 days. Efforts for recovery of overdue
within the time to be done. Regular follow-up and notices
should be sent to borrower
(ii) Restructuring/rescheduling/re negotiation of the
terms of loan agreement in Term loan in case to case basis
in case of need
(iii) Recovery of interest in CC/OD account be done.
(iv) Submission of stock statement and financial data
within the prescribed time limit.
These are some steps to manage (Recover and Reduce) NPA in
Banking Sector
Is This Answer Correct ?    50 Yes 8 No
Prakash Chandra Jatav
# 2
Above answer by Mr. Prakash Chandra is detailed and informative. 
Is This Answer Correct ?    24 Yes 6 No
H.r. Sreepada Bhagi

Other Audit Interview Questions
  Question Asked @ Answers
what is rate of tds in present financial year HP 4
what is meant by vouching?   7
in balabce sheet under what audit fee comes   10
Is vendor statement recon done as two way process? Statement to Ledger Ledger to stement? Cognizent 4
what is the journal entry for this situation? and why? situation: Gratuity for this year TK1000000,which TK700000 shows in income statement and TK150000 will shown in next 2 year each.(this is a management decision)   1
the primary purpose of compliance test is to verify whether?   1
explain the liabalities of a company auditor Wipro 1
What are your primary responsibilities in Accountant employment   3
we want to know that the rate of TDS on contractor , rent, Professional and also know that what is the minimum amount for TDS on Contractor , Professional   4
What is Cash Flow statement? How it can be prepared from Opening & Closing Trial Balance?   1
What wording should be used in the audit report? Accenture 2
depreciation rate for computer software DELL 12
For more Audit Interview Questions Click Here 

Copyright Policy  |  Terms of Service  |  Articles  |  Site Map  |  RSS Site Map  |  Contact Us
Copyright © 2013  All Rights Reserved.   ::