Page 292 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
Lease / HP
the lease rental and hire purchase instalment, which has become overdue for a period of 3 months or
more;
Borrower Wise
in respect of loans, advances and other credit facilities (including bills purchased and discounted), the
balance outstanding under the credit facilities (including accrued interest) made available to the same
borrower/beneficiary when any of the above credit facilities becomes nonperforming asset.
Asset Classification
Every NBFC shall, after taking into account the degree of well-defined credit weaknesses and extent of
dependence on collateral security for realization, classify its lease/hire purchase assets, loans and advances and
any other forms of credit into the following classes, namely:
(a) Standard assets;
(b) Sub-standard assets;
(c) Doubtful assets; and
(d) Loss assets.

Standard Assets
The asset in respect of which, no default in repayment of principal or payment of interest is perceived
and which does not disclose any problem or carry more than normal risk attached to the business.
Sub-standard Assets
• An asset which has been classified as NPA for a period not exceeding 12 months for the
financial year ending March 31, 2018 and thereafter.
• An asset where the terms of the agreement regarding interest and/or principal have been
renegotiated or rescheduled or restructured after commencement of operations, until the
expiry of one year of satisfactory performance under the renegotiated or rescheduled or
restructured terms;
Doubtful assets
• An Asset which remains a sub-standard asset for a period exceeding 12 months for the financial
year ending March 31, 2018 and thereafter.
Loss Assets
• An asset identified as loss asset by the applicable NBFC or its internal or external auditor or by
the Bank (RBI) during the inspection of the applicable NBFC, to the extent it is not written off
by the applicable NBFC; and
• An asset which is adversely affected by a potential threat of non-recoverability due to either
erosion in the value of security or non-availability of security or due to any fraudulent act or
omission on the part of the borrower.

(CNO—NBFC.180) PROVISIONING REQUIREMENTS

Assets % of provision required
0.35 by end of March 2017 [0.40% by the end of
Standard Assets
March 2018]
Note: For those “NBFC – ND”, STANDARD

ASSETS FOR WHICH 0.25% CONTINUES.
Sub-standard Assets 10
Secured Portion of doubtful debts
– up to 1 year 20
– one year to 3 years 30
– more than 3 years 50

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