Chapter 9 - NPA PDF
Chapter 9 - NPA PDF
IRAC NORMS
RESTRUCTURING
LEGAL REMEDIES SARFAESI, DRT, LOK ADALAT
OTS POLICY GUIDELINES
Category of account
Cash
Credits
Overdrafts
Term Loan
3
4
5
6
7
8
10
Bills Purchased
Discounted
Direct
Agricultural The installment of principal or interest thereon remains
Advances
overdue for two Crop seasons for short duration crops or one
crop season for long duration crop.
The crop season for each crop, which means the period up to
harvesting of the crops raised, would be as determined by the
State Level Bankers Committee in each State.
Securitization transaction Amount of liquidity facility remains outstanding for more
than 90 days
Derivative transactions
The overdue receivables representing positive mark-tomarket value of a derivative contract, if these remain unpaid
for a period of 90 days from the specified due date for
payment.
Other Accounts
If any amount to be received in respect of that facility
remains overdue for a period of more than 90 days.
Payment of Interest
In case of default in payment of interest only an account
should be classified as NPA if the interest charged during
any quarter is not serviced fully within 90 days from the end
of the quarter.
Accounts
where
a If the accounts of the borrowers have been regularised before
solitary or a few credits the balance sheet date by repayment of overdue amounts
are recorded before the through genuine sources (and not by sanction of additional
balance sheet date.
facilities or transfer of funds between accounts)
the
accounts need not be treated as NPA
Overdue
General Guidelines:
1. Branches should, classify an account as NPA only if the interest charged during
any quarter is not serviced fully within 90 days from the end of the quarter.
2. All the facilities granted to a borrower /investments in securities issued by the
borrower will have to be treated as NPA and not a particular facility/
investment or part thereof which has become NPA. If the amount in default of
any borrower is outstanding in default account i.e. LC-default account/ LG-default
account / DPG default account/ Co-accepted bills default account, the balance
outstanding in that account also should be treated as a part of the borrowers
principal operating account for the purpose of application of prudential norms on
income recognition, asset classification and provisioning i.e. all the facilities
granted to a borrower / investment made have to be classified as NPA/NPI if one
of them becomes NPA. There are a few exceptions for this as under:
a. Commonality of a Collateral Security has no role in determining the Asset
Classification.
b. The bill discounted under LC favoring a borrower may not be classified as
a Non Performing Advances (NPA), when any other facility granted to the
borrower is classified as NPA. However, in case documents under LC are
not accepted on presentation or the payment under the LC is not made on
the due date by the LC Issuing Bank for any reason and the borrower does
not immediately make good the amount disbursed as a result of discounting
of concerned bills, the outstanding bills discounted will immediately be
classified as NPA with effect from the date when the other facilities had
been classified as NPA.
c. In respect of agricultural advances, as well as advances for other purposes
granted by banks to ceded PACS / FSS under the on lending system, only
that particular credit facility granted to a Primary Agricultural Credit
Society (PACS) / Farmers Service Societies (FSS) which is in default for a
period of two crop seasons in case of short duration crop & one crop season
in case of long duration crop, as the case may be, after it has become
overdue, will be classified as NPA and not all the credit facilities
sanctioned to a PACS/FSS. However, other direct loans and advances, if
any, granted by the bank to the member borrower of a PACS/FSS outside
the on-lending arrangement will become NPA even if one of the credit
facilities granted to the same borrower becomes NPA.
d. In case of bank finance given for industrial projects or for agricultural
plantations, etc. where moratorium is available for payment of interest,
payment of interest, becomes due' only after the moratorium or
gestation period is over. They become overdue after due date for payment
of interest, if uncollected.
3 Availability of security or net worth of borrower/guarantor should not be taken
into account for the purpose of treating an advance as NPA, as asset classification
and income recognition is based on record of recovery and compliance of other
non-financial indicators.
Non-Performing Assets: Page 4 of 98
In respect of consortium advances, each bank may classify the borrowal accounts
according to its own record of recovery and other aspects having a bearing on the
recoverability of the advances, as in the case of multiple banking arrangements.
8 Agriculture Advance: A loan granted for short duration crops will be treated as
NPA if the instalment of principal or interest thereon remains overdue for two
crop seasons. A loan granted for long duration crops will be treated as NPA if the
instalment of principal or interest thereon remains overdue for one crop season.
Long duration crops where crop season longer than one year and the crops which
are not long duration crops will be treated as short duration crops. The crop
season for each crop which means the period up to harvesting of the crops raised,
would be as determined by the state level bankers committee in each state.
9 Direct Agriculture Finance :
(a) Loans to individual farmers including self help groups (SHGs) or Joint liability
Groups (JLGs) i.e. groups of individual farmers provided banks maintain
disaggregated data on such loans engaged in Agriculture only.
(b) Loans to corporate including farmers producer companies of individual
farmers, partnership firms and co-operatives of farmers directly engaged in
Agriculture activities up to an aggregate limit of 2 crore per borrower for the
following purpose:
Non-Performing Assets: Page 5 of 98
(i) Short term loans for raising crops which includes traditional / non traditional
Plantations and horticulture.
(ii) Medium and long term loans for agriculture (e.g. purchase of agricultural
implements and machinery, loans for irrigation and other developmental
activities undertaken in the farm).
(iii)Loans for pre-harvest and post harvest activities viz, spraying, weeding,
harvesting, grading and sorting.
(iv) Export credit for exporting their own farm produce.
10 KCC would be deemed NPA if it remains out of order for a period of two
crop/one crop season (as the case may be). A KCC account will be treated as out
of order if :
a) There are no credits in the account continuously for two crop seasons/one
crop season (as the case may be) as on the date of balance sheet
b) The outstanding remains continuously in excess of the limit for two crop
seasons /one crop season (as the case may be) as on the date of balance sheet
c) The credits in the account are not sufficient even to cover the interest debited
in respect of the account for two crop seasons/one crop season (as the case may
be).
11 In respect of agricultural loans other than those specified above and term loans
given to non-agriculturists identification of NPAs would be done on the same
basis as non-agricultural advances which at present are the 90 days delinquency
norms.
12 Where natural calamities impair the repaying capacity of agricultural borrowers, relief
measures are decided by bank/ branches like - conversion of the short-term production
loan into term loan or reschedulement of the repayment period and sanctioning of fresh
short-term loan subject to guidelines issued by PS&LB HO. In such cases of conversion or
re-schedulement, the term loan as well as fresh short-term loan may be treated as current dues
and need not be classified as NPA. The asset classification of these loans would thereafter
be governed by the revised terms & conditions.
13 Rural Housing Advances: While fixing the repayment schedule in case of Rural housing
advances granted to agriculturists under Indira Awas Yozana and Golden Jublee Rural
Housing Finance scheme it is to ensure that interest / installment payable on such advances
are linked to crop cycle.
14 The credit facility backed by the Central Government Guarantee, though overdue may be
treated as NPA only when the Government repudiates its guarantee when invoked. This
exemption from classification of Government guaranteed advances as NPA is not for the
purpose of recognition of income.
Non-Performing Assets: Page 6 of 98
principal, interest need not be considered as `overdue' from the first quarter onwards. Such
loans/advances should be classified as NPA only when there is default in repayment of
installment of principal or payment of interest on due date of payment.
RECOGNITION OF INCOME & APPROPRIATION OF RECOVERY IN NPA A/C
1)
2)
3)
4)
Income from non-performing assets is not recognised on accrual basis but is booked
as income only when it is actually realized. Branches should not charge and take to
income account interest on any NPA. This will apply to Govt. guaranteed accounts
also. For this purpose simultaneous transfer of account to General Ledger Head: NPA is a
pre-requisite. Interest realized on NPAs may be taken to income provided the credits in the
account are not out of fresh/additional credit facilities sanctioned to the borrower
concerned.
Branches should not take to income any fees/ commission and any similar income on nonperforming assets until it is actually realized. Charges/expenses/insurance etc. on such a
Borrowal account should not be debited to the Borrowers account unless recovered,
the same need to be recorded in the Memoranda Account after charging to Banks
Revenue.
Interest on advances against term deposits, NSCs, IVPs, KVPs and Life Policies should be
taken to income account on the due date, provided adequate margin is available in the
accounts.
When a credit facility is classified for the first time as NPA the interest accrued &
credited to the income account in the past periods, which has not been realized should be
ascertained and same should be reversed and should be credited back in the respective
account itself at the close of the year/half year/Quarter at the branch level by debiting
Profit & Loss Account with following particulars:
Unrecovered Interest reversed and recorded in Memoranda A/c
This will apply to Govt. guaranteed accounts also.
5)
6)
7)
For operational convenience and future records, it is necessary that Branches should first
charge interest (including Penal Interest, if any) up to the date of classification of account
as NPA and then simultaneously ascertain the quantum of interest not realized (DI) which
is required to be reversed as above. This amount will be recorded separately in
Memorandum Account.
In respect of NPAs, fees, commission and similar income that have accrued should cease
to accrue in the current period and should be reversed with respect of past periods, if
uncollected.
Interest on advance guaranteed by Central Government, irrespective of its assets
classification status is not to be taken to income account unless the interest has been
actually realized.
2)
Category
of CRITERIA
Accounts
Sub- Standard
A sub-standard asset is one, which has
remained NPA for a period less than or
equal to 12 months; such an asset will
have well defined credit weaknesses. If
after commencement of commercial
production and classifying a/c as substandard a/c will continue in SS category
for specified period provided facility is
fully secured. (Specified period means 1
RATE OF PROVISION
A general provision @ of
15% on total outstanding
be made without making
any allowance for ECGC
guarantee
cover
and
securities available.
The unsecured exposures
which
identified
as
Substandard
would
Doubtful
ON GLOBAL LOAN
STANDARD
PORTFOLIO BASIS
ACCCOUNT
(Other
than
Restructured
Advances)
Infrastructure
loan
accounts
which
are
classified as Sub Standard
will attract a provisioning
of 20% (escrow a/c)
(i) Unsecured Portion:
Provision @ 100% of
unsecured portion,
(ii) Secured Portion: On
tangible security Up to one year
doubtful25 %
One to three year
doubtful-40%
More than 3 year
doubtful- 100%
Provision is to be made on
outstanding net of DI.
100%
of
the
Outstanding.
builders/developers
for
residential
housing projects (except for captive
consumption) under CRE
** The provisioning on these assets
would revert to 0.40% after 1 year
from the date on which the rates are
reset at higher rates if the accounts
remain standard
2.
Standard
Restructured
Advances
5%
sanctioned need not be made for a period of one year from date of
disbursement.
Accounts with outstanding balance of Rs. 5 crore and above
With a view to bring down divergence arising out of difference in assessment of the value of
security in cases of high value NPAs (A/Cs with outstanding balance of Rs.5 crore & above and also
to enhance the reliability on stock valuations, stock audit at annual intervals by external agencies
appointed as per banks extant guideline, be got done mandatorily.
Valuation of Securities for Provisioning Purposes
(i) Wherever the Incumbent feels that realisable value of IPs is significantly lower than the one on
banks record in accounts with aggregate limits/ outstanding of Rs.10 lakhs & above but less than
Rs.1 crore and value of immovable property mortgaged/charged to the bank is Rs.20 lakhs & above,
he may get the property re-valued from the banks approved valuer provided the valuation is more
than one year old.
(ii) As regards borrower accounts having aggregate limit of Rs.1 crore & above, valuation of
immovable properties charged/mortgaged to the Bank be got done from approved valuer once in
three years. However, valuation in such accounts shall be got done from Banks approved valuer
and fees payable to the valuer be recovered from borrower.
(iii) However, where the value of immovable property to be mortgaged/charged is Rs. 5 crore &
above, branches shall get valuation of such IPs done from minimum two valuers on the Banks
approved panel. In case the difference in valuation is less than 15% the average value may be taken.
(iv) The branches while getting the valuation of IPs charged / mortgaged to the bank, from approved
valuer must take the Market and Realisable Value of the property separately.
(v) In case of Plant & Machinery only Realisable Value should be mentioned in the report and
considered for calculation of provision in the account. Valuation report should mention the brand
names of the Plant & Machinery, Year of Installation, Original cost etc.
(vi) While getting the value of securities assessed by approved valuers, valuation report should
clearly specify the assumptions/ circumstances for having arrived at the given realisable value.
(vii) In case there is substantial variation in the realizable value of charged security(ies) now being
reported and as reported at the last time/ last sanction or renewal, reasons for the same should be
clearly spelt out, preferably the earlier valuations may also be co-related/commented in the latest
valuation report.
GUIDELINES IN RESPECT OF PROJECTS UNDER IMPLEMENTATION INVOLVING
TIME OVERRUN.
Project Loan here means any term loan which has been extended for the purpose of setting up of
an economic activity. The date of completion of the project and date of commencement of
Commercial Operations (DCCO) should be clearly spelt out at the time of financial closure of the
project and formally documented. Legal and other extraneous reasons which are beyond the control
of the promoters, may lead to delay in project implementation and involve restructuring
/reschedulement of loans by banks.
Infrastructure sector is a sector as defined by RBI in its circular on Definition of Infrastructure
Lending
Non-Performing Assets: Page 12 of 98
Income Recognition
Where there is moratorium for payment of interest, Where there is moratorium for payment
Non-Performing Assets: Page 13 of 98
2)
For the purpose of these guidelines, mere extension of DCCO would not be considered as
restructuring, if the revised DCCO falls within the period of two years (Infrastructure Sector) or 1
year (Non-Infrastructure Sector) from the original DCCO. In such cases the consequential shift in
repayment period by equal or shorter duration (including the start date and end date of revised
repayment schedule) than the extension of DCCO would also not be considered as restructuring
provided all other terms and conditions of the loan remain unchanged. As such project loans will be
treated as standard assets in all respects; they will attract standard asset provision of 0.40 per cent.
3)
Any change in the repayment schedule of a project loan caused due to an increase in the
project outlay on account of increase in scope and size of the project, would not be treated as
restructuring if :
a) The increase in scope and size of the project takes place before commencement of
Commercial operations of the existing project.
b) The rise in cost excluding any cost-overrun in respect of the original project is 25%
or more of the original outlay.
c) The viability of the project is reassessed before approving the enhancement of scope
and fixing a fresh DCCO.
d) On re-rating, (if already rated) the new rating is not below the previous rating by
more than one notch.
4) Funded Interest: Income recognition in respect of the NPAs, regardless of whether these are or
are not subjected to restructuring/ rescheduling/ renegotiation of terms of the loan agreement, should
be done strictly on cash basis, only on realisation and not if the amount of interest overdue has been
funded. If, however, the amount of funded interest is recognised as income, a provision for an equal
amount should also be made simultaneously. In other words, any funding of interest in respect of
NPAs, if recognised as income, should be fully provided for.
5) Conversion into equity, debentures or any other instrument: The amount outstanding converted
into other instruments would normally comprise principal and the interest components. If the
amount of interest dues is converted into equity or any other instrument, and income is recognised
in consequence, full provision should be made for the amount of income so recognised to offset the
effect of such income recognition. Such provision would be in addition to the amount of provision
that may be necessary for the depreciation in the value of the equity or other instruments, as per the
investment valuation norms. However, if the conversion of interest is into equity which is quoted,
interest income can be recognised at market value of equity, as on the date of conversion, not
exceeding the amount of interest converted to equity. Such equity must hereafter be classified in the
available for sale category and valued at lower of cost or market value. In case of conversion of
principal and /or interest in respect of NPAs into debentures, such debentures should be treated as
NPA, ab initio, in the same asset classification as was applicable to loan just before conversion and
provision made as per norms. This norm would also apply to zero coupon bonds or other
instruments which seek to defer the liability of the issuer. On such debentures, income should be
recognized only on realization basis. The income in respect of unrealized interest which is converted
into debentures or any other fixed maturity instrument should be recognised only on redemption of
Non-Performing Assets: Page 15 of 98
such instrument. Subject to the above, the equity shares or other instruments arising from
conversion of the principal amount of loan would also be subject to the usual prudential valuation
norms as applicable to such instruments.
where operations are allowed as per the tagging arrangement by the competent authority, such
charges are to be recovered in addition to tagging.
5) Whenever any payment through cheque is collected in any NPA account, except where
operation is being allowed, the credit entry pertaining to such payment should only be credited
after realization of the cheque. (Till realization, such credit be kept in Sundry account).
Collection of any cheque /Transfer Instruments in NPA accounts is strictly prohibited.
6)
: NPA-DL 76100
: NPA-TL 76120
: NPA-DL 76100
: NPA-TL 76120
and slip
into further lower asset classification categories as per
extant asset
classification norms with reference to the pre-restructuring
repayment schedule except as allowed as per para G9.2.2.
3) Standard accounts classified as NPA and NPA accounts
retained in the same category on restructuring by the bank
should be upgraded only when all the outstanding
loan/facilities in the account perform satisfactorily during the
specified period i.e. principal and interest on all facilities in
the account are serviced as per terms of payment during that
period. (Specified Period means a period of one year from the
commencement of the first payment of interest or principal,
whichever is later, on the credit facility with longest period of
moratorium under the terms of restructuring package)
Satisfactory Performance means:
a) Non-Agricultural Cash Credit Accounts
In the case of non-agricultural cash credit accounts, the account
should not be out of order any time during the specified period,
for a duration of more than 90 days. In addition, there should
not be any overdues at the end of the specified period.
b) Non-Agricultural Term Loan Accounts
In the case of non-agricultural term loan accounts, no payment
should
remain overdue for a period of more than 90 days. In addition
there should not be any overdues at the end of the specified
period.
c) Housing & other personal Loan accounts:
It is observed that in a rising interest rate scenario, the
repayment period is normally extended by keeping the EMI
constant. However, in a few cases this results in extending the
repayment period much beyond the retirement age or the
revenue generating capacity of the borrower. Therefore, it is
advised that
(i) While extending repayment period in respect of housing
loans to keep the EMI unchanged, branches should satisfy
themselves about the
revenue generation / repaying capacity of the borrower during
the entire repayment period including the extended repayment
period.
(ii) Branches should not extend the repayment period of such
borrowers where they have concerns regarding the repaying
capacity over the extended period, even if the borrowers want
to extend the tenor to keep the EMI unchanged.
(iii) Branches should provide the option of higher EMI to such
Non-Performing Assets: Page 20 of 98
Bank has prescribed the maximum repayment period for restructured residential housing loans as
30 years from the date of original sanction. or till the borrower attains 70 Years of age. Circle
head may relax the period till the borrower attains the age of 75.
D) Promoters' sacrifice and additional funds brought by them should be a minimum of 20 per cent
of banks sacrifice or 2 per cent of the restructured debt, whichever is higher. This stipulation is
the minimum and bank may decide on a higher sacrifice by promoters depending on the riskiness
of the project and promoters ability to bring in higher sacrifice amount. Further, such higher
sacrifice may invariably be insisted upon in larger accounts, especially CDR accounts. The
promoters sacrifice should invariably be brought upfront while extending the restructuring
benefits to the borrowers. The term 'bank's sacrifice' means the amount of "erosion in the fair value
of the advance" or total sacrifice.
Prior to May 30, 2013, if banks were convinced that the promoters face genuine difficulty in
bringing their share of the sacrifice immediately and need some extension of time to fulfill their
commitments, the promoters could be allowed to bring in 50% of their sacrifice, i.e. 50% of 15%,
upfront and the balance within a period of one year. However, in such cases, if the promoters fail
to bring in their balance share of sacrifice within the extended time limit of one year, the asset
classification benefits derived by banks will cease to accrue and the banks will have to revert to
classifying such accounts as per the asset classification norms specified.
E) Promoters contribution need not necessarily be brought in cash and can be brought in the form
of de-rating of equity, conversion of unsecured loan brought by the promoter into equity and
interest free loans.
F) The restructuring under consideration is not a 'repeated restructuring'.
Elements of Special Regulatory Framework w.e.f. 1.4.15
In line with the recommendation of the Working Group (Chairman: Shri B. Mahapatra) to
review the existing prudential guidelines on restructuring of advances by banks/financial
institutions, the extant incentive for quick implementation of restructuring package and asset
classification benefits available on restructuring on fulfilling the conditions will however be
withdrawn for all restructurings effective from April 1, 2015 with the exception of provisions
related to changes in DCCO in respect of infrastructure as well as non-infrastructure project loans.
It implies that with effect from April 1, 2015, a standard account on restructuring (for reasons
other than change in DCCO) would be immediately classified as sub-standard on restructuring as
also the non-performing assets, upon restructuring, would continue to have the same asset
classification as prior to restructuring and slip into further lower asset classification categories as
per the extant asset classification norms with reference to the pre-restructuring repayment
schedule.
INCOME RECOGNITION NORMS FOR RESTRUCTURED ACCOUNTS
computed as above, reckoning the higher of the outstanding amount or the limit sanctioned as the
principal amount and taking the tenor of the advance as one year. The term premium in the
discount factor would be as applicable for one year. The fair value of the term loan components
(Working Capital Term Loan and Funded Interest Term Loan) would be computed as per actual
cash flows and taking the term premium in the discount factor as applicable for the maturity of the
respective term loan components.
In the event any security is taken in lieu of the diminution in the fair value of the advance, it
should be valued at Rs. 1/- till maturity of the security. This will ensure that the effect of charging
off the economic sacrifice to the Profit & Loss account is not negated.
The diminution in the fair value may be re-computed on each balance sheet date till
satisfactory completion of all repayment obligations and full repayment of the outstanding in
the account, so as to capture the changes in the fair value on account of changes in BPLR,
term premium and the credit category of the borrower. Consequently, banks may provide
for the shortfall in provision or reverse the amount of excess provision held in the distinct
account.
If due to lack of expertise/ appropriate infrastructure, a bank finds it difficult to
ensure computation of diminution in the fair value of advances extended by small/rural
branches, as an alternative to the methodology prescribed above for computing the amount
of diminution in the fair value, banks will have the option of notionally computing the
amount of diminution in the fair value and providing therefore, at five percent of the total
exposure, in respect of all restructured accounts where the total dues to bank(s) are less than
rupees one crore till the financial year ending March 2013.
Further The total provisions required against an account (normal provisions plus
provisions in lieu of diminution in the fair value of the advance) are capped at 100% of the
outstanding debt amount.
The provisions required for Restructured A/cs (including the provision for Diminution in Fair
Value will be maintained/updated/adjusted by Credit (Industrial Rehabilitation) Division at HO,
who in turn will provide an account-wise list of NPA A/cs to Recovery Division before finalization
of Balance Sheet, so as to ensure that in respect of NPA A/cs, the Total Provisions do not exceed
100% outstanding Debt amount.
OTHER GUIDELINES
Under the Debt Restructuring Mechanism for SMEs, in exceptional cases Circle Heads may
permit Restructuring of debt in accounts where the bank has initiated recovery action (under
SARFAESI / filing recovery suit).
Extension of moratorium period may be permitted by the competent authority such that the
total repayment period of the restructured debt falls within the RBI norms. However, the
change in the moratorium is to be linked to the projected/ accepted cash flows.
Restructuring within one year of enhancement may be permitted by the competent authority.
However, the powers for restructuring within one year of sanction of WC/ term loan shall
continue to be vested one level higher
DISCLOSURE
Banks are required to disclose in their published annual Balance Sheets, under "Notes on
Accounts", information relating to number and amount of advances restructured, and the amount
Non-Performing Assets: Page 24 of 98
of diminution in the fair value of the restructured advances. The information on advances
restructured under CDR Mechanism, SME Debt Restructuring Mechanism and other categories are
required to be disclosed separately.
IRAC NORMS-AGRICULTURAL ADVANCES Income Recognition, Asset Classification,
Provisioning & Related Aspects-Agricultural Advances- Kisan Credit Card Scheme
( RD 36/2014 DATED 13.10.2014)
(i) Kisan Credit Card Schemes aim at providing adequate and timely credit support from the
banking system under a single window to the farmers for their cultivation & other needs as
indicated below:
a) To meet the short term credit requirements for cultivation of crops
b) Post harvest expenses
c) Produce Marketing loan
d) Consumption requirements of farmer household
e) Working capital for maintenance of farm assets and activities allied to agriculture, like dairy
Animals, inland fishery etc.
f) Investment credit requirement for agriculture and allied activities like pumpsets, sprayers,
dairy animals etc.
(While the aggregate of components a) to e) above forms the short term credit limit portion,
the aggregate of components under f) forms the long term credit limit portion.)
(ii) Kissan Card Cash Credit limits are being sanctioned and opened in CBS under scheme code
CCAKC and all the operative guidelines for opening of these guidelines in the system have to
be meticulously followed.
(iii)RBI has prescribed that the repayment period may be fixed by banks as per the anticipated
harvesting and marketing period for the crops for which a loan has been granted and the extant
prudential norms for income recognition, asset-classification and provisioning will continue to
apply for loans granted under revised KCC Scheme.
(iv) Income Recognition & Asset Classification (IRAC) Norms as prescribed by RBI are being
circulated by HO Recovery Division interalia explaining applicability of IRAC norms to the
Agriculture Advances as follow:
A loan granted for short duration crops will be treated as NPA, if the installment of principal or
interest thereon remains overdue for two crop seasons. A loan granted for long duration crops will
be treated as NPA, if the installment of principal or interest thereon remains overdue for one crop
season. For the purpose of these guidelines, long duration crops would be crops with crop season
longer than one year and crops, which are not long duration crops, would be treated as short
duration crops. The crop season for each crop, which means the period up to harvesting of the
crops raised, would be as determined by the State Level Bankers Committee in each State.
Depending upon the duration of crops raised by an agriculturist, the above NPA norms would also
be made applicable to agricultural term loans availed of by him. The above norms should be made
Non-Performing Assets: Page 25 of 98
1.1.3
Working capital and term loans for financing production and investment
requirements for agriculture.
1.1.4 Loans to small and marginal farmers for purchase of land for agriculture purpose.
1.1.5 Loans to distressed farmers indebted to non-institutional lenders against
appropriate collateral or group security.
1.1.6 Loans granted for pre-harvest and post-harvest activities such as spraying,
weeding harvesting, grading, sorting, processing and transporting undertaken by
individuals, SHGs and cooperatives in rural areas.
1.1.7 Loans granted for agricultural activities, irrespective of whether the borrowing
entity is engaged in export or otherwise.
1.2
Finance to others (such as corporate, partnership firms and institutions) for
agriculture
1.2.1 Loans granted for pre-harvest and post harvest activities such as spraying,
weeding, harvesting, grading, sorting and transporting.
1.2.2 Finance upto an aggregate amount of Rs. One crore per borrower for the purposes
listed at 1.1.1, 1.1.2, 1.1.3 and 1.2.1 above
1.2.3 One third of loans in excess of Rs. One crore in aggregate per borrower for
agriculture.
In respect of agricultural loans, other than those specified in the said Annexure and term loans
given to non-agriculturists, identification of NPAs would be done on the same basis as nonagricultural advances which, at present, is the 90 days delinquency norm.
APPROPRIATION OF RECOVERY IN NPA ACCOUNTS: [Ref: RD Cir. 26/2013 dtd.
04.06.2013]
W. e. f .01.01.2013 Recoveries in NPA Accounts (irrespective of the mode / status / stage of
recovery actions), henceforth shall be appropriated in the following order of priority:
i) Expenditure/Out of Pocket Expenses incurred for Recovery
ii) Principal irregularities i.e. NPA outstanding in the account gets updated / adjusted, whichever
is earlier?
iii) There after towards the interest irregularities/accrued interest.
A menu option NPACHRG has been customized in the CBS system to capture/recover/waive
the charges incurred for recovery of dues in the NPA account. System will check the credits made
in the NPA accounts from the last recovery date and create transaction, for the outstanding charge
amount or recovery made in the account whichever is lower, debit the loan account and credit
the expenditure head whichever has been debited earlier Report PNBRPT-28/7 has also been
customized, which will show all the NPA accounts wherever recoveries have been received but
appropriation of the same for the charges made in the expenditure account has not been done.
Ref: R.D. Cir No. -13/2014 dated 06.03.2014 Recoveries in WO/Non WO NPA A/cs
Correct Accounting Procedures:To facilitate the Branches to maintain and see at a glance the true and correct position of the
account, to produce the same as an evidence to courts etc. under Bankers Book of Evidence Act,
and to plug the instances of wrong reporting of Cash Recoveries either in Written Off A/cs or in
Non Written Off Accounts and to facilitate the branches to follow correct accounting procedure, It
Non-Performing Assets: Page 27 of 98
has been reiterated that all transactions in the NPA A/cs have to be necessarily routed
through the Borrowal Loan A/cs in the CBS System. Any other Accounting procedure
adopted by the Branches does not carry procedural sanction and may be viewed as a serious
infringement of Bank Guidelines
Recovery in Written Off A/cs is required to be credited to P&L A/c. Income under its sub Code
Income: Bad Debts Written Off Realized (Code 21199). Similarly Recovery of Delayed
Period Interest on OTS approved cases is also required to be credited to Income: Bad Debts
Written Off Realized instead of Income: Interest on Advances.
COMPUTATION OF NPA LEVELS
Keeping in view the need for uniformity across banks in reporting of Advances and NPAs, so as
to avoid any scope for different interpretations by the auditors/public, as also to improve the
comparability of Advances position of banks, RBI has recently advised Banks to compute their
Gross Advances, Net Advances, Gross NPAs and Net NPAs, as per the format given below:
PART A
1.
2.
3.
4.
5.
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
6.
7.
8.
* Principal dues of NPAs plus Funded Interest Term Loan (FITL) where the corresponding contra
credit is parked in Sundries Account (Interest Capitalization Restructured Accounts), in respect
of NPA Accounts.
** For the purpose of this Statement, Gross Advances mean all outstanding loans and advances
including advances for which refinance has been received but excluding rediscounted bills, and
advances written off at Head Office level (Technical write off).
*** Floating Provisions would be deducted while calculating Net NPAs, to the extent, banks
have exercised this option, over utilizing it towards Tier II capital.
For the purpose of computing Gross Advances, interest recorded in the Memorandum account
should not be taken into account.
Supplementary Details
(Rs. in crores up to two decimals)
Particulars
Amount
1.
Provisions on Standard Assets excluding 5(vi) in Part A above
2.
Interest recorded as Memorandum Item
3.
Amount of cumulative Technical Write Off in respect of NPA
accounts reported in Part A above
Provisioning Coverage Ratio for Advances [PCR]
Provisioning Coverage Ratio (PCR) is essentially the ratio of provisioning to gross nonperforming assets and indicates the extent of funds a bank has kept aside to cover loan losses.
At present, the provisioning requirements for NPAs range between 15 per cent and 100 per cent
of the outstanding amount, depending on the age of the NPAs and the security available. Banks
can also make additional specific provisions subject to a consistent policy based on riskiness of
their credit portfolios, because the rates of provisioning stipulated for NPAs are the regulatory
minimum.
To enhance the soundness of individual banks and the stability of the financial sector, RBI has has
asked the banks to augment their provisioning cushions (consisting of specific provisions against
NPAs as well as floating provisions) and ensure that their total provisioning coverage ratio,
including floating provisions, is not less than 70 per cent by 30.09.2010. Also, the PCR is to be
disclosed in the Notes to Accounts to the Balance Sheet.
Particular
Amount in Rs. Crore
1
Gross NPAs plus technical / prudential write-off.
2.
Specific Provisions held including provisions for
diminution in fair value of the restructured
accounts classified as NPAs plus technical /
prudential write-off.
3.
Floating Provisions for Advances (only to the
extent they are not used as Tier II Capital).
4.
DICGC / ECGC claims received and held pending
adjustment.
5.
Part payment received and kept in Suspense
account or any other similar account
6.
Total (2 to 5)
7.
Provision Coverage Ratio [( Row 6/ Row 1) *
100%)]
ASSETS
AND
BACKGROUND: In order to help banks and FIs to resolve the NPAs , the Govt. of India
promulgated Securitization and Reconstruction of Financial Assets and Enforcement of Security
Interest (SARFAESI) Ordinance, 2002 on 21.06.2002 , which was later replaced by Act 54 of
2002.
It has 42 sections divided into VI chapters. The act is applicable to whole of India including J&K.
Supreme Court vide its judgment dated 8.04.2004, in the case of M/s. Mardia Chemicals Ltd. &
others Vs Union of India & Others, upheld the validity of the Act except sub section 2 of the
Section 17 of the Act (deposit of 75% of the amount claimed with DRT along with the
application), which was declared ultra virus of Article 14 of the Constitution of India and directed
the Govt. of India to make certain amendments/modifications in the Act. As a result, the
Enforcement of Security Interest and Recovery of Debts (ESI & RD) Laws (Amendment) Act
2004 came into force w.e.f. 11.11.04
Salient provisions of the act are as Under:ENFORCEMENT OF SECURITY INTEREST:
1) Powers to the secured creditor: Any secured creditor having security interest by way of
Mortgage, Charge, Hypothecation and assignment (not by lien/pledge) may exercise powers
under the Law to take possession of secured assets (U/s 13-4), appoint a person to manage the
secured assets, require any person who has acquired secured assets, to pay to the secured creditor
and if a secured creditor is a Securitization Company, it can exercise power of takeover of
management of business of borrower
2) Conditions for exercising powers under the act: Such power can be exercised provided:
The Asset is classified as NPA as per RBI norms
Value of Financial Assets is more than Rs. One lac;
Security Interest is not created on agriculture land, an aircraft or a shipping
vessel;
Amount due is 20% or more, of principal and interest thereon;
Debt is not time barred;
Loan is not secured by way of pledge, lien & by security of bank deposits;
Asset is not on conditional sale or hire purchase or lease;
Property is not liable to attachment or sale under code of Civil Procedure.
The assets though exempted U/s 60 CPC (One residential house etc), if it
is charged to secure the debts, can be enforced under SARFAESI act.
Non-Performing Assets: Page 30 of 98
3) Possession Notice: U/s 13(2) of the act, a secured creditor has to give a notice in writing to the
borrower to discharge the debt/liability in full within sixty days from the date of notice. It is not
legally necessary to make a recall of the facility and invocation of guarantee separately.
These can be included in the notice Under Section 13(2) itself.
(LAW Division Cir - 04.2011) -- Under Section 31(i) of the SARFAESI Act, it has been provided
that the provisions of the Act shall not apply to any security interest created in agricultural land.
However, instances have come to our notice where IPs charged to the Bank by way of mortgage
are shown as agricultural land in the revenue records but the same are not being used for the
purposes of agriculture and are being used for purposes other than agriculture.
In this regard, attention is invited to the decision the of the Honble High Court of Andhra
Pradesh in the case of Gajula Exim (P) Ltd. Vs. Authorized Officer, Andhra Bank, Main Branch
and two Others (AIR 2008 AP 184), wherein it has been held that The present characteristics and not the potentialities of a land are the proper criterion (to
decide whether the land is agricultural or not). If a land is ordinarily used for purposes of
agriculture or for purposes subservient to or allied to agriculture it would be agricultural
land. If it is not so used, it would not be agricultural land. The question, how a land is
ordinarily used, would be one of fact depending on the evidence in each case.
The Honble Court, after going through the entire material in the case took the view that the land
on which the factory is situated cannot be treated as an agricultural land. Therefore, it is not
exempted under the Act.
It may also be added that the aforesaid view of the Honble Court was challenged before the
Honble Supreme Court by way of SLP (Civil) No.17714/2008 but the same was dismissed by the
Supreme Court vide its order dated 04.08.2008 with the observations that We do not find any
ground to interfere with the impugned order.
In view of the above legal position, it is advised that whenever the Banks action under the
SARFAESI Act is challenged in a similar situation, the aforesaid legal position can be of
assistance to the Bank to contest the same.
In other cases, where the mortgaged IP is being used for agriculture purpose, recovery
proceedings be initiated by filing suit in DRT/Court, as the case may be, and the property in
question be got attached and sold through the DRT/Court.
4) Representation by the borrower: (U/S 13(3A) if, on receipt of the notice under sub-section
(2) the borrower makes any representation or raises any objection, the secured creditor considers
such representation or objection as not acceptable or tenable, he shall communicate to the
borrower within one week of receipt of such representation or objection along with the reasons
for non acceptance of the representation or objection. This has been recently increased to 15
days.
Non-Performing Assets: Page 31 of 98
In consortium accounts consent of 60% of the secured creditors (in BIFR reference consent of
3/4th of secured creditors ) need to be taken before taking possession/other measures u/s 13(4) of
SARFAESI Act.
SALE OF ASSET:
1) Minimum Notice Period: A minimum 30 days notice be given to the owner after taking
possession by the authorized officer and the eventual sale of both movable and immovable
properties. In a recently concluded case, Supreme Court held that it is left at the discretion of the
Authorized Officer to take or not to take the possession of the immovable property before
effecting the sale as per Rule 9 framed under the act.
2) Designated official: The authorized officer has to be an officer in the Rank of the Chief
Manager of a Public Sector Bank or such other person authorized as such by the board of
Directors of the Bank.
3) Mode of sale: After taking possession, lender can sell the asset through public auction/inviting
tenders or by private treaty. If it is by public auction/tender, it should be backed by public notice
in two newspapers out of which in vernacular language having sufficient circulation.
4) Reserve Price: Reserve price would be arrived at after making proper valuation. For movable
assets authorized officer will take estimated value & for immovable assets, authorized officer will
obtain valuation from board approved valuer. Sale below the reserve price can be done only if
both borrower and lender agree except when there is a natural decay or cost of possession
may exceed the sale price.
5) Confirmation of Sale: Sale will be confirmed after deposit of 25% by the highest bidder,
balance will be paid within 15 days of confirmation of sale.
STRATEGIES FOR SUCCESSFUL SALE PROCESS UNDER SARFAESI ACT
(RD 42/2014 dated 18.12.2014)
SARFAESI Act prescribes various chain of actions to be taken by the Bank against the
defaulting borrower/guarantor/mortgagor, till it is taken to its logical end.
After serving the Notice under Section 13(2) of the Act, in case there is no positive
response from the borrower/guarantor/mortgagor, the Authorized Officer (i.e
Officer not less than a Chief Manager) after taking Symbolic and/or Physical
Possession may further initiate action for sale of the secured assets.
Under the SARFAESI Act, sale may be made by any of the following modes:
(a) By obtaining quotations from parties dealing in secured assets or otherwise
interested in buying the secured assets
(b) By inviting tenders from public
(c) By holding public auction or
(d) By private treaty
The aim is to secure maximum price for the assets to be sold.
The most transparent and effective methods of sale of the secured assets are:
1) Public Auction and
2) Inviting Tenders
For free, fair and transparent auctions, Ministry of Finance directed the Banks
Non-Performing Assets: Page 32 of 98
to adopt the Electronic medium for conducting auctions also known by the name
E-Auctions.
Steps for making E-Auctions successful
High failure rate of E-Auctions, clearly and categorically indicate that still there is
lot of scope in initiating the desired steps for making an E-Auction a successful
endeavor. A list of such desired steps is given below as a ready reckoner/checklist to
facilitate the field officials to ensure to adopt the same and accelerate the process of
recoveries through sale of secured assets:
1) Valuation of secured assets
Valuation of securities is an important and sensitive issue in the process of
enforcement of security interest, as it forms the base for fixation of Reserve Price,
before proceeding for sale. Valuation Report relied upon should normally be not
more than a year old. Branch Incumbent, besides relying upon the Valuation Report
submitted by the Valuer(s), as per extant guidelines, should involve him/herself in
the process and make discreet enquiries from the Property Dealers/Real Estate
Agents/Residents of that area etc. so that a fair assessment may be made, before
fixing the Reserve Price.
2) Fixation of Reserve Price
A realistic Reserve Price will always improve the chances of successful sale
process. Reserve Price needs to be fixed by taking into cognizance, various factors
e.g. location of the property, multiple tenancy, IPs not demarcated, various
Government obligations/litigations/attachments etc. Thus a pragmatic and rational
approach is the key to success.
3) Publicity
Publicity can be bifurcated mainly into two parts:
(1) As per statutory/regulatory guidelines and
(2) General practices for fetching better quotes/price
(a) Statutory/Regulatory Requirements
(i) For statutory compliance, Sale Advertisement is to be compulsorily
published in two leading Newspapers, one of which should be in
vernacular language. Further, in addition to giving 30 days Notice to the
borrower/mortgagor/guarantor, Sale Notice is also required to be affixed
on the conspicuous part of the property.
(ii)The Sale Notice is to be loaded at the following two websites, compulsorily:
www.pnbindia.in and www.tenders.gov.in
(b) Other Important Steps for Publicity
In addition to the above mentioned modes of publicity which are more or less
statutory/regulatory in nature, in order to brighten the prospects of successful
Auctions and fetch better price, following Publicity measures may also taken:
(i) Sale Notice can be displayed on Notice Boards of all the branches of the
Circle/ATM Cabins etc.
(ii) Other than the statutory requirement of publishing the Sale Notices in two
Newspapers, it can be published in some additional Newspapers, having good
circulation in that particular area.
(iii) To give wider publicity, a Strip can be displayed on the Local Cable TV/Other
Non-Performing Assets: Page 33 of 98
1) Appeal to DRT: The borrower may appeal to DRT without depositing any amount. Such
appeal has to be preferred within 45 days (U/s 17) from the date on which such measures had
been taken. The appeal can be made only if secured creditor takes possession of the securities or
any other action U/s 13(4) and not merely on notice U/s 13(2). Since the act has not given any
limit for filing appeal before DRT, therefore appeal can be made even for amounts below Rs.
10 lac. The court fee as applicable for filing suit before DRT in general cases, shall be applicable.
2) Appeal to DRAT: The borrower has to deposit 50% of the amount decreed by the DRT or
claimed by the secured creditor, whichever is less, before making application at the 2nd stage i.e.
DRAT. DRAT, however, may reduce it to 25%. This appeal should be made within 30 days (U/s
18) from the date of receipt of orders of DRT.
3) Time Limit: It has also been made mandatory that the DRTs would dispose of the cases within
60 days & may extend the period upto 4 months after recording the reasons in writing else any
party may move to DRAT which may direct DRT for expeditious disposal.
4) Provisions for J & K: In the state of Jammu & Kashmir the borrower may move to the court
of District Judge and against his order to the High Court after depositing 50% of the amount
decreed by the District Judge which has power to reduce this amount to 25%.
RD CIR 9/2014 dt. 25.02.2014 :- Issue notices u/s 13(2) and 13(4) of SARFAESI Act separately
for the securities situated outside the State of J&K and separately for the securities situated in the
state of J&K
CONTRAVENTION:1) Imprisonment: Any person who contravenes or attempts to contravene or abets to contravene
the provisions of this act or any rules made under the act can be punished with imprisonment for a
term which may extend to one year or with fine or both.
2) Penalty: Contravention or non-compliance may attract fine which may extend to Rs. 5000/- for
every day of default.
3) Additional Fine: U/s 28, if Securitization/Reconstruction company or any of its officers fail
to comply with the directions given by Reserve Bank, they can be fined upto an amount of Rs.5
lac and in case of continuing offence they can be charged with additional fine of Rs. 10000/- for
every day during which the offence continues.
SARFAESI AND OTHER RECOVERY MEASURES:
1) Cases under BIFR/SICA: Protection under SICA is not available once a secured creditor
takes action under this act. In case any reference is pending before BIFR/SICA, it will abate and
SARFAESI will prevail.
2) Action under Civil Courts: U/s 37, the remedy available under this act is in addition to all
remedies available under any other law. Hence creditor can proceed under this act even in the
matters which are under consideration by any Court Of Law.or sub-judice. However, if the
competent court has already passed any order, bank can proceed under this act only after taking
prior permission from the court of competent jurisdiction.
3) Cases already pending before DRT: In Transcore V/s Union of India and IOB, Supreme
Court has decided that even if proceedings are pending with DRT, the bank can proceed against
the borrower under this act.
etc.
shall be payable to the Company.
Procedure for uploading Auction Notices at www.pnbindia.in (RD 02/2015 dt. 09.01.2015)
For uploading the Auction Notice at www.pnbindia.in, no extra information is required from
the Circle Offices. The Auction Notice published/to be published in the newspapers, in the
PDF format fulfills the requirement.
Uploading any Notification/Notice etc. on the Banks website will take place in a
centralized manner. Therefore, now onwards all the Auction Notices will be uploaded on
the Banks website centrally by the HO: MASD and not by Recovery Division. Instead of
sending these Auction Notices to Recovery Division, Head Office, New Delhi, Circles
Offices will ssend copy of auction Notice published in the Newspapers to MASD, HO in
PDF Format at following e-mail IDs (No Hard Copy) and only its copy be endorsed to
Recovery Division, Head Office, New Delhi :
S.NO.
1
2.
Division
HO:MASD
HO: RECOVERY DIVISION
Email address
[email protected]
[email protected]
[email protected]
[email protected]
1. Auction Notice should be invariably placed on the Banks and Govt. of India
websites for at- least 30 days in advance.
2. Branches will send details of the Auction Notice(s) to its Circle Office (soft as
well as hard copy) and Circle Offices for placing the Auction Notices on the
Government website www.tenders.gov.in after verifying the facts and
completeness of requisite information.
3. Circle Office will maintain a record of such Auction Notices and allot/mark
serial number starting from 1 (year-wise) e.g for 2014 the first Auction Notice
sent to Recovery Division shall bear serial number 1. Similarly in 2015 it will
again start from 1 and so on.
4. All other guidelines for enforcing the Security Interest under SARFAESI Act
have to be complied with, meticulously.
5. Regarding creation of User IDs information on the prescribed format (RAD
02/2015) be submitted to recovery division HO New Delhi.
ADOPTION OF E-AUCTIONS-AMENDMENTS IN GUIDELINES (RD 04/2015 DATED
09.02.2015)
BACKGROUND :
As per extant guidelines following two Service Providers are conducting E-Auctions under
SARFAESI Act and at DRTs, on behalf of the bank are being paid Rs. 5000/- per
Event/ auction:
(i) M/s C-1 India
(ii) M/s Nextenders
Till 31.03.2015 the e-auctions will continue to be conducted by existing two vendors.
Amendments in the existing guidelines:
All E-Auctions (i.e under SARFAESI Act & at DRTs) will be conducted at the Circles from
01.04.2015 onwards. Large Corporate Branches (LCBs) will also get their E- Auctions
conducted through the respective Circle Offices, however their Authorized Officer will be
invariably present in the Circle Office, carrying the mandate from the Incumbent of the LCB, to
take any decisions related to the E-Auctions. In such cases Circle Office will provide only
infrastructural facility to conduct E-Auction and rest of the activities and all other
responsibilities associated with the conduct of E-Auction will be taken care by LCB.
Charges Payable to the Service Providers
The concerned Branch having the NPA account, for which E-Auction is being
conducted, will make payment to the Service Provider by debiting Expenditure: General
Law Charges (P & L Code No. 1081001) at the following rates: Per successful E-Auction
/Event @ Rs. 4000/- (Previously Rs. 5000/-) inclusive of Service Tax as applicable, with
maximum of 10 items (movable items viz. Plant, Machinery etc. and/or immovable
Non-Performing Assets: Page 40 of 98
properties) per borrower per auction, being conducted on the same day. For every
additional 5 items additional charges @ Rs. 2000/- shall be paid to the Service Provider.
For failed per E-Auction/Event only Rs. 1000/- will be paid.
The above prices will be all-inclusive and TDS or any other statutory levies will be
deducted by Bank as per Income Tax rules from time to time and are applicable, both for,
E-Auctions to be conducted at DRTs and under SARFAESI Act and are applicable with
immediate effect i.e E-Auctions conducted on or after 09.02.2015.
For payment of above expenses, the Incumbent Incharge of the branch has full powers and no
further reference needs to be made to the Circle Office.
Clarification
If there are multiple properties in an NPA account and for which separate reserve Price
has been fixed and timings of the Auctions are different (even if on the same day), each
Auction will be considered as separate Event and payment is to be made to the Service
Providers separately for each Event, despite the fact that properties belong to a single
borrower.
However, in case of multiple properties in an account (subject to the upper limit of 10
items), if a single reserve price has been fixed and timing of the Auction is only one,
then only it will qualify for a single Auction.
CENTRAL REGISTRY:- Central Govt. has set up a Central Registry. After its set up,
particulars of every transaction of creation of security interest be filed within 30 days of creation.
Any modification be also filed. The Company is a Government Company with a shareholding of
51% by the Central Government .Select Public Sector Banks , National Housing Bank are also
shareholders of the Company.
Help Desk.
* CERSAI has set up help desk at New Delhi for trouble shooting both in technical and functional
areas through telephone (Nos. 011 26176847, 011-26176855, 011-26176856) and email (email ID
[email protected]).
* web based Helpdesk system w.e.f. 01.12.2011 and the same can be accessed at
http://www.helpdesk.cesai.org.in through internet .
Company under liquidation, notice U/s 13(2) of SARFAESI act is to be served on to the
official liquidator and if no response is received, bank to obtain leave of the Company Court
under section 537 of Companies Act to take measure under section 13(4) of the SARFAESI act.
DEBT RECOVERY TRIBUNALS (DRT)
DRTs were established in 1993 under Recovery of debts due to Banks and Financial institution
act 1993, on recommendations of Narsimham Committee. The act came into effect on 25th June
1993 and extends to whole of India except J & K. It contains 37 sections spread over 6 chapters.
LOK ADALATS
ACT: Lok Adalats are created under Legal Services Authority Act-1987.
Category of accounts: All NPA accounts both suit filed and non suit filed
Amount ceiling: Eligible category of accounts with outstanding up to & inclusive of Rs. 20 lac
(increased from Rs. 5 lac), without any cut-off date. For coverage under Lok Adalat, the claim
amount should not exceed Rs. 20 lac.
Banks may also participate in Lok Adalats organized by DRT/DRAT for settlement in accounts
where outstanding are above Rs. 20 lac.
Policies: Lok Adalat cases are examined by the Compromise Committee formed at various levels
to arrive at a range within which compromise can be considered in a given case and the
decision regarding waiver can be considered by competent authority keeping in view the sacrifice
involved in the settlement.
Payment: The down payment of the compromise amount is preferred. On merits of the case,
monthly/quarterly installments (maximum upto 2 years) may be agreed with the default clause
providing for the failure of the compromise in case of non deposit of OTS amount as per the
terms of award.
Interest: Future interest may be agreed to as per General Guidelines for settlement of NPAs
through Negotiated settlement.
Benefits: (i) No court fee is involved. (ii) If no settlement is arrived, parties may go/continue with
legal proceeding.
Legal status: Its decrees have legal status and are binding on both the parties, however, decree
being in nature of consent decree, no appeal against the decree is allowed. If no settlement is
arrived at, the parties can continue with court proceedings, if already initiated.
Limitation clause: Pendency of matters with the Lok Adalat does not save limitation; therefore
care must be taken for filing suits with civil courts within the limitation period, if need be.
Policy for transfer / sale of financial assets to Securitization Companies (SCs) /
Reconstruction Companies (RCs) /Other Banks/ FIs / NBFCs etc. (excluding RRBs)
(RD Cir. 05/2015 dated 12.02.2015)
Scope
Objective
Exempted category of
advances for sale
Authority
/
Delegation of power
for identification &
initiating sale process
Approving authority
Withdrawl
of
In case of sale by way of SRs, the expected yield for SRs to be in the
range of 5-10% p.a.
Sale to other Banks/FIs/NBFCs etc, will be made only on cash
basis. The entire sale consideration should be received upfront and
the asset can be taken out of the books of the selling Bank only on
receipt of the entire sale consideration. Under no circumstances
can a sale to other banks be made at a contingent price.
Sale Consideration
for the Financial
Assets Sold to Other
Banks/FIs/NBFCs
etc. ( i.e other than
the SCs/RCs)
Miscellaneous
Bank will not use auction process for sale of NPAs as a price
discovery mechanism for such assets, where the bids are invited
from SCs/RCs and no bid is accepted without assigning any
reason.
If a bid received is above the Reserve Price and a minimum 50%
of sale proceeds is in cash and also fulfills the other conditions
specified in Offer Document, acceptance of that bid would be
mandatory for the Bank.
Fixation of Reserve Important aspects associated with fixation of Reserve Price
Price
The Reserve Price for each account placed for the sale, in which
prospective buyers (ARCs/Banks/FIs etc.) have evinced interest,
will be declared before hand, at the time of sending invitation to
them to submit bids. For this, the HOASC will finalize the Reserve
Price based on the recommendations received from FGMOASC. In
those accounts where no interest has been shown by the buyers, the
Reserve Price will not be disclosed.
Separate Reserve Price may be fixed for offers received on
(a) 100% cash basis and
(b) Other than 100% cash basis
Since sale on cash basis is always beneficial for the bank, the
Reserve price fixed for 100% cash basis will be 10%-15% (to
be decided by HOASC) less than that on other than 100% cash
basis. Further, in case offers are received at the minimum Reserve
Price fixed in both the cases, the offer at 100% cash basis will be
preferred.
Pricing / Valuation
The objectives of the valuation are essentially to:
a) arrive at Net Present Realizable Value of the assets;
b) provide a basis for fixation of Reserve Price, evaluation and
acceptance of offer of Securitization Companies /
Reconstruction Companies/ other banks/FIs/NBFCs etc for
sale / transfer of assets
The bank shall make internal assessment to determine Net Present
Realizable Value (NPRV), which will be preferably based on the
latest valuation report obtained from the Banks approved valuer
Latest Valuation Report which should not be older than 1 year,
as on the date of submission of PAIR to the intending buyer.
Wherever it is not possible to have fresh Valuation Report i.e less
Non-Performing Assets: Page 48 of 98
Resolution cost
Evaluation of offer
Prudential norms
Resolution
disputes
of
Monitoring
Agencies
Guarantee
Mode
of
Settlement
Commission
Training
Supreme Court has cautioned the Banks against use of coercive methods
for recovery of loans and in the other case on the same issue State
Consumer Forum of New Delhi has given stern warning to Banks that if
any complaint is received against any Bank alleging use of force by
recovery agents, the punishment of minimum one month imprisonment
shall be imposed under section 27 of the Consumer Protection Act 1986.
The branch should inform the borrower the details of Recovery Agency
firms/companies while forwarding default cases to the Recovery Agency.
For NPA accounts (suit filed / non suit filed)
Commission payable on amount of
Age of NPA
recovery
A/cs
with O/s A/cs with O/s above
upto Rs.1 lac
Rs.1 lac
Upto 3 years
7.5%
5%
3 years upto 5 years
10%
7.5%
Beyond 5 years
15%
10%
For decreed accounts
Age of decree
Commission payable
Upto 3 years
5% of amount recovered
Above 3 years upto 5 years
7.5% of amount recovered
Above 5 years
10% of amount recovered.
The allocated accounts may be withdrawn from Recovery Agencies after six
months from the date of allocation in case no effective result is achieved by
Recovery Agencies within this period subject to approval of Circle Head.
The number of hours of training for various categories of Recovery Agents
Sl.
Educational Qualification
hours
Monitoring /
Supervision
& Control
No.
of
Training
100 hours.
70 hours.
ENGAGEMENT
OF
SECURITISATION/
RECONSTRUCTION
COMPANIES
(SCs/RCs)/FIRMS/COMPANIES/ (other than SCs/RCs)/ RETIRED BANK (PNB)
EMPLOYEES AS RESOLUTION AGENT
(RD Cir. 22/14 dated 23.05.2014)
Bank has decided to empanel SC/RC, Other Firms / companies, Retired Bank employees to
act as resolution agents for resolving NPAs .The guidelines are as under:
Particulars
2. Eligibility
Criteria
for
empanelment
of Resolution
Agents
SCs/RCs
The Securitisation /
Reconstruction Companies
(SCs/RCs) which have
obtained the certificate of
registration from RBI under
Section 3 of the SARFAESI
Act
and having Object Clause of
Memorandum of
Association permitting them
to act as Resolution Agent
for the bank.
Other Firms
A
Firm/Company
promoted by and/or
employing
professional
person
/persons like Chartered
Accountant /Company
Secretary
/
Cost
Accountant and / or
honorably
retired
Senior Executives of
the Banks (not less
than DGM/GM) with
minimum 3 years
experience in the
resolution of NPAs.
Firms/Companies not
having
3
years
experience but having
professionals
with
minimum 3 years
experience
in
resolution
of NPAs, will also be
eligible.
For all other cases, the
matter may be referred
to the Head Office,
Recovery Division to
consider on merits of
the case.
Invitation of Head office , Recovery Concerned
Field
applications
Division
shall
invite General
Managers
applications from Scs/Rcs. shall
invite
applications
from
Firms / Companies
(other than SCs/Rcs)
Non-Performing Assets: Page 53 of 98
PNB Employees
Honorably retired bank
employees (including
Voluntarily
Retired
Employees).
PNB retired clerical
staff has also been
permitted to work as
resolution agent.
Competent
Authority for
empanelment
Eligibility of
accounts for
allotment to
Resolution
Agents
5.
Identification
& Allocation
of accounts
Delegation of
Powers.
Retired
Employees).
ED for empanelment as FGM,
after Upto
Circle Head
Resolution cum Recovery engagement
of scale-III
Agents and allocation of Resolution agents CH Scale IV FGM
NPAs under Retail Loans may
advise
the & V
on portfolio basis
dealing officials from Scale VI Executive
the office to visit the & VII
Director
site/office
of
the
(through
Firms/Companies
HRD)
This panel shall be
circulated to all the
offices
for
the
utilization of their
services
for
resolution of non
performing accounts
under the scheme
Following eligibility criteria are common for all the 3 categories of
Resolution Agents i.e. SCS/RCs, Other Firms & PNB Retired employees:
(i) NPA accounts categorized as Doubtful / Loss whether non suit filed, suit
filed or decreed accounts shall be covered under the Scheme.
(ii) A financial asset in which any case is pending before a Court / DRT / BIFR
/ Action under SARFAESI may also be considered for allocation under the
Scheme.
(iii) The financial assets where non funded facilities are yet to be crystallized
are not to be allocated.
(iv) In case of written off accounts, outstanding balance at the time of write off,
shall be taken as Notional outstanding.
Rs. 1Cr Circle
More than
Circle
Up to Rs. Clerical Circle
to 5 Cr. Head
Rs.10 lac
25 Lac
staff
head
Head
And upto Rs.
Above Rs. Scale I, Circle
Above
Field
1 Lac but II & III Head
Rs.5
General 1 crore
up to Rs.
Crore.
manager
100 Lac
Above
Field
Rs. 1 crore up General
Above Rs. Scale
Circle
to
Rs.
5 Manager 10
Lac IV & Head
crores
Scaleupto
V
Rs.250
Above
5 Executive lacs
Criteria
for Ledger
of
allocation of outstanding
Rs.1 cr. & above
accounts
(Further,
all
Retail
Loans
under
Doubtful/Loss
category may be
allocated
to
them Circle-wise
on
portfolio
basis in addition
to
NPAs
(Doubtful/Loss)
of Rs. 1 cr. &
above.)
Resolution
Limit
for A
number
of Agent shall be
Accounts to be initially allocated
allocated
to 10 to 15 accounts
the Resolution for resolution and
it
may
be
Agents.
subsequently
allocated
more
accounts based on
their performance.
However, in case
of eligible Retail
Loan NPAs under
portfolio basis, the
limit
will
be
restricted to 50
accounts
per
Circle with total
ceiling
of
8
Circles. Therefore
at a time, a
maximum of 400
Non-Performing Assets: Page 55 of 98
crores*
(in Director
emergent
circumstances
& with prior
permission
from ED)
Above
Scale
Circle
Rs.10 lacs VI & Head
upto
above
Rs.500
lacs
Ledger outstanding of
more than Rs. 10 lacs.
Commission
For
SCs/RCs/Other
Firms/Companies
Fixed Component.
SCs/RCs and Firms/Companies other than SCs/RCs may be paid
commission at the rate of 5% of the recoveries, as fixed component.
However, there are no changes in the other expenses payable e.g
Insurance charges, Security/Valuation charges after taking the possession
by Bank/Official Liquidator/DRT Receiver, legal expenses including fees
to the advocates, charges relating to auction, which shall be borne by the
Bank.
Variable Component
S.No
Distress value Rec up to Recovery
Recovery
of security
90%
of above 90% above
Principal
up
to principal
principal
Cases
with No
5% of the
1
No
distress
recovery
Incentive
Incentive
value of tangible
in excess of
security
more
principal
than
principal
amount.
Cases
with No
6% of recovery in excess of
distress
90% of the principal
Incentive
value of tangible
security between
50%
to
90%
of
principal
amount.
Cases
with 7% of any recovery
3
distress
value of tangible
security less than
50%
of
principal
amount
Cases
without 10% of any recovery
4
tangible
security
Note. A consolidated commission of 10% of recovery shall be payable to the SCs/RCs for
resolution of Retail Loans under NPAs entrusted to them on portfolio basis.
2
The above mentioned rates payable to all categories of Resolution Agents are all
inclusive of taxes whatsoever may be applicable.
Incumbent Incharge of the branch will be the competent authority to finalize the
bill/claim submitted by the Resolution Agents and its payment, based on their record
of recoveries and as per the Banks extant guidelines. In case of any dispute, Circle
Head may take the final decision, considering facts of the case and for LCBs the
concerned FGM shall be the competent authority for settlement of disputes
Miscellaneous Terms & Conditions
Following terms and conditions are applicable to all the 3 categories of Resolution Agents.
The Circle Office where the account is located shall provide to Resolution Agent
all information including Dues of the borrower/claim lodged with the liquidator in case of
liquidation, complete address of borrowers/co-obligants and copies of plaints in case of
suit filed and the details of the charged securities, attachments if any, if desired by the
Resolution Agents. Further, Circle office shall coordinate the job of Resolution Agent
through a Nodal Officer not below the rank of Chief Manager.
Ensure that the agents engaged in the recovery process carry out verification of the
antecedents of their employees, (police verification) Further, re-verification of antecedents
should be resorted to at an interval of 2 years.
In case Resolution Agents desire for Power of Attorney from Bank to act on behalf of
the Bank for the resolution of the account, they may be provided as per formatAnnexure- POA enclosed as per Circular.
Keeping in view the provisions of the RTI Act, salient features of the Policy e.g criteria
for empanelment, experience, fees/commission etc. may be placed on the Banks Website
for the convenience of the Resolution Agents.
Resolution Agent shall ensure that while acting as Resolution Agent, they do not
give rise to any pecuniary liability to bank otherwise they shall be held liable for their
action.
Bank has right to withdraw any financial asset allocated to the Resolution Agent
without assigning any reason subject to approval of Field General Manager.
Bank has right to terminate the empanelment of Resolution Agent at any time without
assigning any reason subject to approval of Field General Manager for SCs/RCs/Other
Firms/PNB Retired Employees based on the inputs/information provided by the Circle
Head. The financial assets allocated to them will also be withdrawn.
The recovery effected by the Resolution Agent shall be deposited with the branch
concerned immediately and a statement of account of the recovery duly certified by the
Branch Incumbent for all 3 categories i.e SCs/RCs, Other Firms and PNB Retired
Employees, shall be submitted by the Agent on quarterly basis to the branch.
In case any dispute arises the matter cannot be taken to Civil Court.
The object clause of SC/RC/Company (under category of Other Firms) is to permit to act
as Resolution Agent for bank/banks.
The branch should inform the borrower, details of the Resolution Agent while forwarding
default cases to the Resolution Agents, for which they may use Annexure-10.of the
circular. Further, since in some of the cases, the borrower might not have received the
details about the Resolution Agents due to refusal/non-availability /avoidance and to
ensure identification, it would be appropriate if the agent also carries a copy of the notice
and the authorization letter from the bank along with the identity card issued to him by the
bank and the agency firm/company. Further, where the Resolution Agent is changed
during the recovery process the borrower should be notified the change of Agent and new
Resolution Agent should carry the notice and the authorization letter along-with his
identity card.
This will facilitate the Resolution Agents to keep track of developments. However, any meeting
of the Resolution Agents with the lawyers/advocates must be attended by the concerned branch
official. In case any account is withdrawn from the Agencies, the same should also be promptly
informed to the concerned lawyer.
Branches/Circles should generally involve the Resolution Agents to participate during settlement
discussions with the borrowers. In fact, presence of Resolution Agents who are responsible for
follow-up with the borrowers is beneficial for settlement through negotiations and can result into
higher settlement. This facilitates to integrate the efforts of the Resolution Agents and Bank
officials and avoids any communication gap.
Circle Heads to ensure that:
Police verification Reports of the antecedents of their employees, which may include preemployment police verification, as a matter of abundant caution are available in the Circle
Office records. Further, re-verification of antecedents should be resorted to at an interval of 2
years.
It has been brought to the notice that branches, while providing the requisite
information pertaining to allotted NPA accounts to the Resolution Agents, also part with
the documents e.g the file, mortgage deeds etc., which may jeopardize the banks interest.
It must be ensured that parting of documents to Resolution Agents is not permitted under
any circumstances.
* Resolution Agents must ensure that:
(i) There is a tape recording of the contents/text of the calls made by them to the customers, and
vice versa. It may take reasonable precaution such as intimating the customer that the
conversation is being recorded, etc.
(ii) They preserve documents and/or data in accordance with the legal/regulatory obligation of the
bank
* . Monitoring & Review of the Scheme
* The list of SCs/RCs/Other Firms/PNB Retired Employees as Resolution Agents, shall be
placed on the Banks website.
Circle Office shall monitor the progress in the matter of Resolution of NPAs through
Resolution Agents on quarterly basis, and FGM on half-yearly basis and by HO on
yearly basis and same shall be placed before ED.
Monitoring
For recovery of Banks dues in irregular and NPA vehicle loans (including Tractor
advances), following procedure is to be followed by Branch Manager for
repossession and disposal of the security of vehicle including Tractors:
(a)
Branches shall resort to repossession of security only for the purpose of realization of its
dues in default as the last resort and not with whimsical intention of depriving the
borrower of security / vehicle.
(b)
In addition to the usual / normal recovery reminders / notices / efforts, a 15 days notice
calling upon the borrower to remedy the default shall be given (with copy to guarantor/s)
in writing in local vernacular language. The notice shall state that in the event of failure
on the part of the borrower / guarantor to do so within the prescribed time, the bank shall
be entitled to seize the vehicle and proceed for selling it to recover its dues as per terms
of the loan agreements and in consonance with the law. Draft notice is enclosed as
Annexure-I of RD 23/2014.
(c)
(d)
The borrower shall be at liberty to repay banks dues on any day before the date fixed for
sale and get back possession of his vehicle. In such an eventuality further action of sale
shall be stopped.
Estimated price of vehicle shall be ascertained and notified to the borrower / guarantor,
and on the notified date for sale, the vehicle shall be sold by Public
Auction/Tender/Quotations and/or through a private contract at the sole discretion of the
bank in a fair and transparent manner, where borrower will also be advised to be present.
(e)
Proceeds of sale, net of expenses incurred in this regard, shall be promptly credited to
borrowers loan account towards liquidation. Any surplus shall be refunded to the
borrower and for any deficit further recovery action shall be initiated as per our normal
guidelines.
(2)
For taking possession and /or for sale, the BM may require services of a suitable
Agency. Circle Heads may shortlist suitable Agencies out of the panels of approved
Recovery Agencies and Supporting Agencies keeping in view their infrastructure,
expertise, skills, storage space, past performance, area of operation etc as Seizure
& Disposal Agents for undertaking the job of seizure, storage and disposal of
tractors and of other vehicles.
(a)
While initiating action for seizure of vehicles (including tractors), intimation to the
Police Authorities is neither regulatory nor mandatory requirement. However, it is
advisable to send such communication to the Police Authorities, for information only.
(b)
Further, in case the borrower refuses to sign the paper/possession memo (document for
establishing the fact that Bank has taken possession of the vehicle) when the vehicle is
repossessed by the Bank, copy of same be sent to the borrower through Registered
Post (Acknowledgement Due). Further, on repossession of the vehicle by the Bank,
Immediate information be also provided to the local Police Authorities (AnnexureII of RAD 23/2014), intimating time and place when the vehicle was repossessed
(Rajeev Raijyada versus S Ravindra Bhat, High Court decision dated 18.01.2005).
(3)
After seizure of the vehicle, prompt and quick steps shall be taken to dispose off / sell
the vehicle but in any case not exceeding 60 days from the date of seizure, failing which
the vehicle / tractor may be restored back to the borrower.
S.No.
Service rendered
Fee payable
A
Seizure and transporting the vehicle Maximum Rs.2500/- per vehicle (Cars,
to a nearby godown
Tractors, Trucks etc.)
B
Acting as custodian of vehicle / Maximum Rs.100/- per day for a maximum
Storage Charges
period of 60 days during which either the
possession is to be restored to the borrower or
the vehicle is sold.
C
Sale of vehicle
5% of amount realized.
D
Recovery without seizure of 5% of amount recovered
vehicle/Tractor
(4)
Sale proceeds net of these expenses shall be credited to the borrowers account. If there is
surplus, the same shall be remitted to the borrower(s) and in case of deficit, further
recovery measures should be taken.
Non-Performing Assets: Page 63 of 98
General Discount
Specific Discount
IPs having old/multiple tenancy/multiple suits and/or dispute about
validity/enforceability of the mortgage/charge.
10%
20%
B-II
More than 1 year old stay against SARFAESI action/Auction under 10%
Sarfaesi failed as no bidder came.
B-III
Attachment of IP by Tax/Revenue authorities (if no priority charge)**
10%
B-V
IP not demarcated / Undivided share mortgaged / no independent access.
10%
B-VI
Mortgagor is dead
10%
Maximum discount restricted to 40%. (if more than one attendant factors).
** In case of priority charge, deduction of full dues / amount of attachment. Also, if proof exists
of IPs having statutory encumbrances like Property Tax, Lease Rent, Development charges etc.
the deduction shall be 50% of such dues, apart from the above discounts.
Net Present Value of the OTS amount:
(OTS amount + Interest at BR)
If OTS amount is to be recovered without interest or at a rate lower than BR net present
value shall be calculated by adjusting difference in BR and charged rate of interest in the
OTS sanction.
(Payment within 3 months without interest is considered immediate payment) .
GENERAL GUIDELINES ON ONE TIME SETTLEMENT OF NPAs
All Borrowal/Loan accounts identified as NPA in terms of extant RBI guidelines
outstanding as at the end of last quarter shall be eligible for considering under these
Policy guidelines for compromise/negotiated settlement/one time settlement and/or
write off..
RBI reported 1 .OTS proposal in such NPA accounts having book outstanding of Rs. 25 lac &
above shall be considered at the highest level i.e. Management Committee/ Board.
Willful
default/Fraud 2. Cases involving outstanding balance of up to Rs. 10 lac where an amount higher
than NPRV/Book Outstanding (whichever is higher) is being recovered may be
cases
considered at COCAC level within the delegated power of the sacrifice involved
provided the staff side case, if any, has been decided against the erring official(s).
3 OTS proposals in accounts having outstanding balance of up to Rs. 10 lac where
Coverage
Criminal
action cases
Recoverable
Dues
Minimum
Indicative
OTS amount
OTS offer is lesser than the NPRV/Book outstanding shall be considered on case to
case basis by HOCAC Level II as per their vested powers subject to post facto
information to Management Committee on Quarterly basis.
4. Cases involving outstanding balance of Rs. 10 lac & above but below Rs. 25 lac
where an amount higher than NPRV/Book Outstanding (whichever is higher) is
being recovered shall be considered by HOCAC Level II.
5 OTS proposals in accounts having outstanding balance of Rs. 10 lac & above but
below Rs. 25 lac where OTS offer is lesser than the NPRV/Book
outstanding shall be considered on case to case basis by HOCAC Level III as per
vested powers.
6 The criminal cases filed under Section 138 of Negotiable Instrument Act
shall not be governed by these guidelines and OTS proposals in such cases shall
be dealt in normal course as per vested powers.
Cases, where criminal action initiated / FIR lodged, will be considered by
MC/Board.
Present Ledger outstanding + *interest @ Base Rate simple or contractual rate of
interest whichever is lower.
(*Interest shall be calculated on simple reducing balance basis starting from the
Balance outstanding as on the date of NPA. Recorded interest on classification as
NPA will be added in Recoverable Dues. )
For NPAs Under direct agricultural advances with balance outstanding up to
Rs.10 lac (including Kisan Credit Cards but excluding Tractor Advances)
recoverable dues shall be calculated with interest @ 6% simple, irrespective of
age of NPA.
In decreed accounts, recoverable dues shall be calculated as per the above rate
or decretal rate whichever is lower.
Minimum recoverable amount/recoverable dues shall be calculated, as at the
close of the quarter preceding the date of the proposal and shall include
recorded legal/other expenses also.
If NPRV is
Min. Indicative OTS Amount
> Recoverable dues
Recoverable dues
< Recoverable Dues but > Book NPRV
Outstanding
< Book Outstanding
NPRV
Where NPRV is Zero
Whatever maximum can be recovered
The basis for negotiation shall always be Memoranda Dues and should aim
at recovering maximum share of the same.
Under Direct Agriculture Advances upto Rs. 10 lac,
the realizable value of primary/collateral security
will exclude
the agricultural land offered as security.
However, security available other than agricultural land shall be
taken into consideration for arriving at the NPRV
Payment term
Upfront
the rank of Circle Head. Sacrifice in such cases would be the Difference of Min.
Recoverable Dues and Offer Amount
Proposal for assignment of Debt as part of OTS shall be considered at the level
of Management Committee of the Board, if OTS is less than Book
Outstanding, by ED/CMD if > Book Outstanding
SPECIAL GUIDELINES FOR CONSIDERING OTS IN WRITTEN OFF ACCOUNTS
Borrowal NPA accounts, which were written off earlier duly approved by the
Coverage
competent authority, whether by leaving a balance of Rs. 100/ - or not.
Relevant
/ The date on which the account was written off in the books of the branch, i.e. the
Material date date on which the amount of revenue loss reimbursed by HO/CO was credited to
the account
Base amount
Net Outstanding prior to Write off i.e. the book outstanding (exclusive of
Suspended Interest/ De-recognized Interest) as on the relevant/ material date
shall be the base amount. The base amount is to be duly adjusted for
recoveries, if any, subsequent to the relevant/ material date.
Recoverable
The base amount (duly adjusted for recoveries if any, subsequent to write off), as
dues
above, may be treated as Recoverable dues without applying any future
interest.
Minimum
A comprehensive view on the capacity of the borrower(s)/ Guarantor(s) shall
indicative
have to be taken. Since these cases were already written off by competent
amount
authority in the past in terms of Banks laid down policy on write off,
whatever maximum can be recovered under given circumstances shall be the
amount to be recovered.
Sacrifice/ waiver in such cases may be calculated as the Difference between
Base Amount and the Compromise Offer
Payment term Preferably be paid in lump sum. Where the borrower is unable to pay the
entire amount in lump sum, 15-25% be recovered upfront and the balance
amount within a period of 3 months. In exceptional circumstances, longer
repayment period (not exceeding 12 months), together with interest at the
existing Benchmark Prime Lending Rate (*) from the date of settlement up to the
date of final payment, can be considered by the next higher authority.
Cases where the compromise offer is 50% or more of the base amount:
Sanctioning
Powers
Rs. lac
Approval
Manager
Manager
Sr.
Chief
Asstt.
of
Scale I
Scale II
Manager
Manager
General
sacrifice/
Manager/D
waiver,
GM
not
exceeding: 1.00
2.00
3.00
5.00
10.00
Cases where the compromise offer is less that 50% of the base amount : Next
higher authority.
Write Off : In case of write off proposal involving ledger o/s of Rs. 20 lac and above, it should
be backed by report of detective agency/investigating agency with reference to traceability of
obligants/ascertaining the attachable assets of borrowers/guarantors.
Powers to write off at different levels is kept in abeyance; except final write off of accounts
with residual balance of Rs. 100/-; which may be written off after 1 year if o/s balance at the
time of write off was up to Rs. 25000/- and after 3 years in other cases.
Non-borrowal fraud cases / Cases of Theft and Dacoity
These cases will be considered for write off by FPIS, HO by the appropriate authority. For all
cases of loss of cash in theft/dacoity/robbery etc. and non-borrowal Fraud and non-borrowal other
Impaired Assets,
Delegation of Powers.
Level of Authority HOCAC (Amt. in lac)
Level- I HOCAC---------50.00
Level II HOCAC--------75.00
Level III HOCAC--------100.00
MC---------------------------FULL
( Powers to be exercised per case basis) .
The above powers to approve sacrifice in Non Borrowal Impaired Assets shall be exercised by the
respective authorities, if duly recommended by the Committee constituted.
ASSIGNMENT OF DEBT AS PART OF OTS:
There may be certain cases where borrowers/guarantors want to settle the dues
with Bank through OTS but have no liquidity for making payment. In such a
situation, they arrange funds from their friends/relatives/third party and/or Asset
Reconstruction Companies who are ready to lend the money for making payment
to the Bank. In lieu of this the said lender wants to secure himself and request the
Bank to transfer all its rights to recover the dues from the borrowers (right of
subrogation) to him to which the borrowers have also agreed. This arrangement is
known as OTS through Assignment of Debt. In such cases, Memorandum of
Assignment of Debt be got approved from Law Division, HO. However, a
Standard Format is already prescribed in our Policy of Sale of NPAs to
ARCs/NBFCs/other Banks.
Assignment of Debt proposals shall be approved at a level not lower than
HOCAC Level II subject to the delegated powers irrespective of Book o/s an
OTS amount .
Authority
before
Whom the status
report
will
be
placed
Top 100 borrowal a/cs of <5.00cr in each MC(As per RBI
cat Sub STD DF and Loss
Calendar
of
Review)
NPAs With O/s > 5 Cr
ED
Fresh Slippage during the Quarter >= 5 Cr CMD
Fresh Slippage during the Quarter < 5 Cr ED
but >= 1 cr
Fresh Slippage during the Quarter < 1 Cr GM (Recovery)
but >= 50 lac
Fresh Slippage during the Quarter < 50 lac DGM (Recovery)
but >= 10 lac
NPA with o/s balance of < 10 lac but above CH
1 lac including Fresh slippage
NPA below 1 lac including Fresh Slippage BM
Periodicity
Once in a Year
Once in a Year
As and when
As and when
As and when
As and when
Quarterly/As and When
Quarterly/As and When
In case of suit filed cases where OTS Proposals are approved and payment of OTS amount is spread
over a period of time or where the OTS amount is proposed to be received in installments, the
parties shall consent for a decree as prayed for, in the plaint/DRT application with provision to pay as
per OTS terms, subject to a default clause that in the event of borrowers failure to pay OTS amount as
per the terms approved, all concessions/relief shall be treated as
withdrawn. The Consent Decree shall be obtained for the full amount of the claim subject to the
condition that in case of payment of the amount as per OTS terms, the decree will stand satisfied.
Under no circumstances the Consent Decree for OTS amount only shall be obtained. In such cases
memo of compromise (Annexure-II) has to be filed by all the parties i.e Bank as well as
Borrowers/Guarantors/Other Liable Parties before the Court /DRT and a Decree/Order, in terms of the
compromise memo, has to be obtained/got passed from Court/DRT.
2) Payment of OTS in lump sum
In case payment of OTS amount is proposed in lump sum, bank may give a communication of No
Objection to the borrower to make payments as per Annexure-III. Further, on receipt of full and
final payment as per the terms & conditions of the OTS/Compromise, a receipt in full and final
settlement, as per Annexure-IV, of banks claim can be issued/suit be withdrawn /satisfaction of
decree may be recorded without entering into any OTS agreement and/or consent decree etc.
(C) Decreed Accounts
In case of decreed accounts, on receipt of the entire OTS amount, a memo of satisfaction of decree
shall be filed in the respective Court. In Decreed cases no agreement needs to be entered into. The
position is explained hereunder:
(a) If execution petition is not filed, a No Objection Letter can be issued as per Annexure-III.
(b) If execution petition is filed, appropriate statement may be made before the Court/RO about the
matter being under compromise recovery made and for keeping in abeyance of EP/RC for the required
time. If lump sum payment is received/full payment as per compromise terms is received, then
satisfaction can be got recorded.
(D) Thus importance of obtaining Consent Decree/Memoranda of settlement needs to be understood in
true spirit but at the same time it needs to be ensured that recovery of OTS amount should not be
delayed for obtaining the Consent Decree/OTS Agreement and the securities charged to the bank
are to be released only after receipt of OTS amount in terms of sanction.
(E) All the Annxures/Agreements/No Objection Letters may be suitably modified as per terms
and conditions of sanction of each proposal and if need be, assistance of the Law
officer/Manager/Sr. Manager (Law)/ dealing Advocate be obtained before execution of
agreement/issuance of receipt/filing of memo/application in the Court/DRT.
PRAYAAS-STAFF INCENTIVE SCHEME
(RD 37/2014 dt. 28.10.2014)
Prayaas
Staff The scheme is in operation upto 31.03.2015 and thereafter till it is
Incentive
modified/revised.
Scheme
for
NPA recovery
Eligible
NPAs (Doubtful/Loss) with balance outstanding below Rs. 10 lac and all
Accounts
written off accounts.
Non-Performing Assets: Page 71 of 98
Exceptions:
1) Accounts allocated to Recovery Agents/Resolution Agents/ Business
facilitators as on 31.03.2014
2) OTS approved before 01.04.2014 and under implementation.
Recovery
eligible
Incentive
for
The valuation assessed by the approved valuer shall be got verified and vetted from the branch
officials as under:
O/S balance above Rs 5 Cr.
(iv) Effectiveness of the RMSs/MRMSs should be reflected through numbers of NPA accounts
resolved and amount recovered, instead by number of shivirs organized.
During Special Recovery Campaigns launched by the Head Office, Circle Offices are advised
to organize Mega Rin Mukti Shivirs (MRMSs) for which following parameters have been laid
down:
S.No.
1
2
3
4
Number / Amount
200
Rs. 50 lacs
Rs. 2 lacs
Rs.150 lacs
Important Note
(i) All such Shivirs where the above mentioned criteria remain unfulfilled, do not qualify for
the Mega Rin Mukti Shivirs.
(ii) During the Rin Mukti Shivirs and Mega Rin Mukti Shivirs progress made in respect of
NPA accounts with balance outstanding of upto Rs. 10 lacs only, will be accounted, for
performance assessment. Although Circle Heads may resolve high value NPA accounts during
such Shivirs but recoveries, up-gradation, OTS approved will not form part of reporting.
Conducting Recovery Suits Interim Reliefs INTERLOCULATORY APPLICATIONS.
(RD cir - 12/2011 dt 28.06.2011)
To ensure recovery of dues to the Bank and to safeguard the securities / assets available with the
defendants during the pendency of the suits various interim reliefs to be prayed have been
included in the Model Draft of the Plaint circulated vide Law Division Circular No.16/law/2013
dated 07.08.2013. Therefore it has been repeatedly stressed that we should move applications
before the courts / DRTs to obtain injunction / restraint order, attachment before judgment,
appointment of receiver etc. wherever such measures are necessary.
It is observed that such interim reliefs are generally not sought while filing the suit and even
thereafter applications for obtaining interim reliefs are generally not filed and/or if filed/included
in the plaint are not properly agitated/contested/pursued. The detailed relevant provisions of
hypothecation / pledge / book debts agreement etc. are given in the RD Cir. 12/2011 dated
28/06/2011, for taking up with the concerned counsels for filing applications for interim reliefs
quoting the relevant clauses of the agreements to facilitate decision by courts / DRTs in favour of
the Bank.
POLICY FOR CLASSIFICATION AS WILFUL DEFAULTERS IN NPA A/cs
(RD Cir. No. 30/2014 dt. 11.07.2014).
Non-Performing Assets: Page 75 of 98
Identification
of person
performing borrowal accounts with outstanding (funded facilities and such nonfunded facilities which are converted into funded facilities) aggregating Rs.25
lakhs and above, where willful default is identified by the Bank.
The accounts where outstanding comes below the cut off limit of Rs.25 lac
and in cases where Bank has agreed for compromise settlement and the
borrower has fully paid the compromise amount need not be included in the
Wilful Defaulters lists.
In identified/reported cases of willful defaulters where outstanding amount
has come down below Rs. 25 lac on account of write off and not due to
settlement/recovery from the borrower, the branches should still report the
name of the borrower in the list of wilful defaulters as per the extant system.
a)Bank is advancing loans/making finance to different entities such as
Individuals, HUF, Firms and Legal entities such as Corporate Bodies,
Companies, Societies, and Trusts etc. Keeping in view, the constitution of
borrowers and the persons responsible for looking after the affairs of the
enterprise/ business of the borrower, need is to identify as to whether there is any
involvement of the person proposed to be a willful defaulter in the events of
Willful Default.
Such persons may be:
(i) Borrowers
(ii) Entrepreneurs
(iii) Karta of HUF
(iv) Promoters of Company
(v) Directors of Company, (when the account became NPA).
(vi) Present Directors
(vii) Nominee Directors
(viii) Independent Directors
(ix) Partners/ Sole Proprietor/ Trustees etc. in individual capacity.
(The role of Directors/Promoters of the Company who leave or resign the
Company without the permission of the Bank in contravention to the covenants/
terms of sanction of Loan, be looked into while identifying willful defaulters)
(The above list is only indicative and not exhaustive)
b) While dealing with willful default of a single borrowing company in a
Group, the Bank should consider the track record of the individual company,
with reference to its repayment performance to its lenders.
c) Individual Guarantors - In case of individual Guarantors, the events of
willful default on their part need to be identified on account of which the
Guarantor is to be reckoned as willful defaulters. It be identified as to:(i) Whether the guarantors having capacity/means to repay the dues of the
bank but not paying dues of the Bank despite recall of the Loan and demand
for payment has been made upon the guarantors.
(ii) Whether the guarantors have been transferring their assets so that Bank
may not be able to recover its dues?
(iii) Whether guarantors are beneficiary of siphoning / diversion of funds, or
are party to the fraudulent transactions?
Process
declaring
willful
defaulter
Penal
Measures
Reporting to Branches to compile the list of willful defaulter of Rs.25 lac and above
as at end of March, June, September and December every year and
RBI / Credit
submit the information to their Circle office within 7 days from the
Information
close of the quarter.
Companies
Circle Office, after consolidating the information shall submit the
consolidated information within 12 days from the close of the quarter
to Recovery Division, HO for onward submission to RBI (in case of
Non suit Filed Cases), CIBIL and other three companies namely M/s
Experian Credit Information Company of India Pvt. Ltd., M/s Equifax
Credit Information (P) Ltd. & M/s High Mark Credit Information
Service (P) Ltd.( in case of Suit Filed Cases) of which the our bank is
member.
Procedure for With a view to imparting more objectivity in identifying cases of willful
default, decisions to classify the borrower as willful defaulter has been
Identification
entrusted to a Committee on Willful Defaulters (headed by Executive
of
Willful
Director) consisting of:
Defaulters
(i) Executive Director (Incharge of Recovery)
(ii) General Manager, Credit Monitoring Division, HO
(iii) General Manager, IRMD, HO
(iv) Dy. General Manager, Recovery Division, HO (Convenor)
Recovery Division, Head Office will place the matter before Committee on
Willful Defaulters and communicate decision of the Committee on Willful
Defaulters to the Circle/ Branch. The decision taken on classification of willful
defaulters should be well documented, supported by requisite evidence and
should clearly spell out the reasons for which the borrower has been declared as
wilful defaulter vis--vis RBI guidelines
The borrower should thereafter be suitably advised about the proposal
to classify him as willful defaulter along with the reasons thereof. The
borrower concerned should be provided reasonable time (say 15 days)
for making representation against such decision, if he so desires, to a
Grievance Redressal Committee headed by the Chairman and
Managing Director and consisting of two other senior officials.
On receipt of any representation within the stipulated period of 15
days, the same may be sent to HO for consideration of the Grievance
Redressal Committee. The cases where no such representation is
received may also be informed to Recovery Division, HO so as to
enable the authorities at HO level to take a view on final declaration
of the said borrower as willful defaulter.
Grievance Redressal Committee should also give a hearing to the
borrower if he represents that he has been wrongly classified as
willful defaulter.
A final declaration as willful defaulter should be made after a view
is taken by the Committee on the representation and the borrower
Non-Performing Assets: Page 79 of 98
Grievance
Redressal
Committee
Miscellaneous
Stock Audit of Large Borrowal Accounts in NPA Category ( RD Cir 03/2013 dated
09.01.2013)
Detailed guidelines in respect of Stock Audit of Large Borrowal Accounts have been
Conveyed vide LA Circular No. 102 dated 08.09.2010 viz.
Non-Performing Assets: Page 80 of 98
(i). Annual stock audit should be got compulsorily done in respect of all borrowers whether
standard or NPAs, enjoying fund based and working capital limits of Rs. 5 crore and above from
our bank.
(ii). In case of borrowers enjoying fund based working capital limits less than Rs. 5 Crore, Stock
Audit may also be got done in emergent cases and/or where banks interests demand. However,
for modalities of stock audit, prior concurrence of the concerned Circle Head be obtained.
(iii). In cases where the borrower is enjoying working capital limits (fund based) of less than Rs. 5
crore from our Bank and Rs. 20 crore and above in aggregate from the banking system, the matter
should be taken up with lead bank/major share-holder banks in multiple banking arrangement for
getting the stock audit conducted.
(iv). Annual Stock Audit should be compulsorily conducted in all B to D risk rated accounts
enjoying fund based working capital limits of Rs. 1 crore and above.
(v). In respect of consortium advances, where we are the leader, the stock audit may be got
conducted with the consent of the member banks and in cases where we are not the leader, we
may take up the matter with the Lead Bank for getting the stock audited of the borrowal account.
The final decision regarding getting the stock audited of the borrowal account under consortium
advances should, however, be based on consensus.
It has been observed that despite above guidelines, Circle Offices are neither getting the Stock
Audit done in NPA accounts nor the position of Primary Security in the shape of hypothecation of
Stocks/Book Debts is getting monitored/controlled in the Post NPA stage of the account; which
interalia facilitates the borrower to dispose off
the hypothecated securities without
routing/depositing their sale proceeds in the account, resultantly adversely affecting the
recovery/up-gradation efforts due to dilution of the securities at the time of enforcement either
through SARFAESI / Court / otherwise.
It is further clarified that calculation of Drawing Power as Nil in terms of sanction does not
necessarily mean that value of the Hypothecated Security too can be treated as Nil. Field is
advised to take a careful note of incorporating the correct/reliable value of security of
Hypothecated Stocks/Book Debts while submitting
Status Notes/Progress Reports of NPA accounts as also incorporate the same properly and
correctly in LADDER, so that system generated calculation of Provisions in NPA accounts has
complete reliability.
PUBLICATION OF NAMES & PHOTOGRAPHS OF DEFAULTING BORROWERS
(RD 04/2014 dated 14.02.2014)
EDUCATION LOAN
Educational loans , where there is delay in repayment, While banks are free to take noncoercive methods for recovery of their dues, practices such as displaying names and
photographs of defaulting students be stopped forthwith.
GETTING INFORMATION OF ATTACHABLE ASSETS OF LOAN DEFAULTERS BY
OBTAINING WEALTH TAX RETURNS FROM WEALTH TAX AUTHORITIES
(RD 27/2014 DATED 09.06.2014)
Bank has been filing Original Applications (OA) in Debt Recovery Tribunals (DRTs) wherever its
dues are Rs.10 lac and above and Civil suits in the Civil Courts where the dues are less than Rs.10
lacs. A number of decrees remain unexecuted due to inability of the bank to provide attachable
assets of the Judgment Debtors. As per Wealth Tax Act, every individual, Hindu Undivided Family
and Company whose net wealth exceeds the maximum amount (presently Rs.30 lacs), is liable to
file Wealth Tax Return. Ministry of Finance, Department of Revenue (Central Board of Direct
Taxes) after examining the position has clarified that information on the assets of loan defaulters to
enable recovery of loans by Public Sector Bank (PSB ) from such defaulters is in public interest and
if application is made in the prescribed format, to the Chief Commissioner or Commission,
information asked for can be provided.
Procedure of obtaining Wealth Tax Return
(i)
(ii)
(iii)
(iv)
(v)
WAIVER
OF
LEGAL ACTION
1)Sarfaesi
1)Compromise
/
2)Suit filed /Decree / Execution of OTS
Decree
2)Write Off
3)Compromise
4)Write Off
NPA are to be categorized in separate GL/SGL heads to have instant data related to fresh
addition / reduction and NPA Level as on any date.
Description
GL_SUB
Head
Code
76100
Non
Performing NPA Demand Loan
Advances ( Weekly code55299, Office Account
Code-<Sol_id5529901)
NPA Cash Credit
76110
NPA OverDraft
76115
NPA Term Loan
76120
NPA Inland Bills Purchased
76125
NPA Inland Bills Discounted
76130
NPA Pre-shipment Advances
76135
NPA Foreign Bills Purchased
76140
NPA Foreign Bills Discounted
76145
NPA Advances to Commercial banks in 76150
India
NPA Advances to Co-operative Banks in 76155
India
NPA Advances to banks outside India
76160
NPA Others
76165
NPA suit filed
76170
NPA Decreed
76175
NPA Borrowal Fraud
76180
Non Borrowal Impaired Loss of Cash Internal Fraud
86100
Non-Performing Assets: Page 85 of 98
Balance
Sheet
code
62120
63120
86100
63120
86100
63120
86100
63120
86100
63120
to
Corresponding operative GL Head as well as the Classification of account has to be
changed to Standard through Menu option MEAC. For the convenience of the user, a
menu option UPGNPA has been customized for combined (Shifting of GL Head and
change of classification) activity.
DESCRIPTION
NPA A/C RELATED DETAILS
COWO
SARF
RCYM
RADM
MISC
User is required to feed data related to all NPA accounts marked in the CBS system using the
menu option NPAD.
This data is required to generate the following:
1. Memoranda of dues (RI).
To create the memoranda records user is required to follow the steps given below:
i) Generate report through menu option PNBRPT 28/3 (Report to know the list of
NPA A/Cs
to be entered through menu option NPAD)
ii) Feed all the relevant fields through the menu option (NPAD).
RELEVANT FIELDS FOR CREATION OF MEMORANDA ARE
HEREUNDER:
EXPLAINED
DESCRIPTION
Options
are
available
at
key
F1.(Add/Modify/Inquiry/Delete/Undelete/Cancel/Verify).
user to input AC-Account in this field
ENTITY TYPE
User has to give valid account no. of sixteen digits. Customer
ENTITY ID
id will be populated on press of key F4.
DI/SI
REVERESED DI/SI reversed and credited in the account as per revised
guidelines or appropriated during write off be given in this
/APPROPRIATED
field
Unrecovered interest amount up to the last accrual date(last
RI
interest applied upto NPA date), This date has been made
available in report(PNBRPT-28/3). RI will be calculated by
the system after this date
Claim received amount/appropriated at the time of write off be
DICGC/CGFT
given here.
EXTENT
OF Extent of Amount of guarantee available to
secure the outstanding amount in the account from
GOVT.GUARANTEE
Central/state govt
NET
MEANS
OF Amount of net means of guarantor as per latest
CR.
GUARANTOR
Value of IPs available as part of net means of guarantor
IP OF GUARANTOR
Name of banks/FIs if applicable
CONSORTIUM
BANKS/FIs
DESCRIPTION
Options
are
available
at
key
F1.(Add/Modify/Inquiry/Delete/Undelete/Cancel/Verify).
USER TO PUT ACCOUNT NUMBER
USER TO put account name here
ELIGIBLE
FOR
SARFAESI
Date of eligibility
DATE OF NOTICE 13(2)
DATE OF NOTICE 13(4)
DATE OF POCESSION
OF SECURITY
NATURE OF SESCURITY
DATE OF SECURITY
SALE
SECURITY
SALE
AMOUNT
APPROACHED
FOR
COMPR
COMPROMISE
SETTLED
OTS Recovery amount
Other Recovery Amount
NPA Account sale date
SC/RC/OTHER
BANK/NBFC
NPA A/c SALE AMOUNT
LATEST STATUS
DI REVERSED
DICGC
APPROVED
ECGC
CLAIM Status of ECGC Claim be given
APPROVED
Give here net recoverable amount
NRR Balance
Put here provision amount
PROVISION HELD
FUNCTION CODE
DESCRIPTION
User to select function code A (ADD)
The valid account no. of sixteen digits be given, for which
details are required to be entered
The name will populate on press of key F4 after giving account
number in the previous field.
Valid value is W for recovery in written off accounts , C for
OTS approved in written off accounts and N for all other NPA
accounts which neither written off nor compromised
Help at Key F1 is available. Valid values are LA for Lok
Adalat, RA for recovery agencies, RC for recovery camps
Recovery Date
Recovery Amount
NOTE: Verification of records entered through RCYM is not required. User is required to enter
details through menu option NPAD and COWO for the accounts written off even after the
31.03.2010 but recovery details in such accounts will not be required to be entered by the user
through menu option RCYM.
RECOVERY AGENT DETAILS
MENU RADM
FIELD
FUNCTION CODE
ACCOUNT NUMBER
ACCOUNT NAME
Agent Code
Agent Name
Date of Allocation
Commission paid
DESCRIPTION
Options are available at key F1. Add/Modify/Inquiry/Delete/
Undelete/ Cancel/Verify)
The valid account no. of sixteen digits be given, for which
details are required to be entered
The name will populate on press of key F4 after giving account
number in the previous field.
Give here Recovery Agent code allocated
Give here name of Recovery Agent
Date of Allocation of the account for recovery be mention here
Commission paid for this account for recovery
MISCELLNAEOUS DETAILS
MENU MISC
FIELD
FUNCTION CODE
ACCOUNT NUMBER
ACCOUNT NAME
SECTOR
Method of lending
CONSORTIUM DETAIL
MRTP/GROUP
DESCRIPTION
Options are available at key F1. Add/Modify/ Inquiry/
Delete/Undelete / Cancel/Verify)
The valid account no. of sixteen digits be given, for which
details are required to be entered
The name will populate on press of key F4 after giving account
number in the previous field.
Give here Sector as RBI loan classification
Give here method of lending whether consortium etc.
Put here maximum 70 character name of bank etc.
Give here details of Group etc.
FIELD DESCRIPTION
Mention Debt acknowledgement date in S details of
Account through ACM-M option and verify
Use Menu NPAD and fill up details of (i) DI REVERSED
(ii) RI UPTO ACCRUAL DT (iii) PROVISION (iv)
DICGC/CGFT (v) ECGC
Update suit status field in NPAD menu giving RC FILED
ON [ DATE] field
/DECREE Update GL sub head code of the account through TACBSH
SUIT
FILED
OBTAINED
WLA
(WAIVEMENT
OF Update through menu Option COWO Enter Y in WLA
LEGAL ACTION) APPROVED
approved field and give date of WLA
WRITTEN OFF CASES
Use COWO menu and update Written Off Flag Y, Date
of write off, Revenue loss amount if any, Write off
approval level.
RESTRUCTURED ACCOUNT MAINTENANCE IN CBS
To facilitate data addition / modification /deletion / inquiry in CBS in respect of restructured
facilities the existing menu option RSAM is to be used and data may be fed in following ways:
Account Number
Valid account number is one which has been rescheduled in CBS i.e.
the Schedule No. in E-details is other than 01. In CBS it is
necessary to re-phase the restructured facility first and then add it
through RSAM
This date need not be entered as the system will automatically pick
up the same from E-details of the account
Suitable codes from the list should be filled in
This field is not accessible. It only populates the status of deletion of
a particular record
Multiple Records
Date of Restructure
Remarks
CDR Flag
Exit CDR
Charge Particulars
Charge Date
Non-Performing Assets: Page 95 of 98
Inputs
A- Add, M-Modify, V-Verify, D-Delete, IInquiry
16 digit Account number of the customer
Auto Populated on the basis of existing data
Confirm (Y/N)
Y/N
M Modify (Unverified record can be modified, after Verification modification not allowed)
V Verify - Verification should be done with user other than the one who has Added/Modified.
Verification is must after any of the operation (Add/Modify)
I inquiry (Input Account Number, only Status like total charges, waiver, Recovery and total
amount due is displayed in Inquiry, for details reports are also available)
D Delete ( Only unverified record can be deleted)
WAIVER DETAILS OF NPA ACCOUNT
A Add (For type W - Waiver details for a NPA Account, Waiver amount should be less than
the outstanding amount)
I inquiry (Input Account Number, after waiver)
RECOVERY DETAILS OF NPA ACCOUNT
A Add (For type R - Recovery details for a NPA Account, Recovery amount is calculated
automatically by the system on the basis of credits after the charge/last adjustment date)
V Verify - Verification should be done with user other than the one who has Added/Modified.
Verification is must after any of the operation (Add/Modify)
On verification Transaction is created debiting customer account and crediting Expenditure head
which was debited earlier for the charges (as per the details added in C-option of NPACHRG
menu)
NPA MANAGEMENT RECPORTS:
MENU OPTION - NPAMIS ( PHASE I )
Sr.No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Module/report name
SAMD_3
SAMD_4
SAMD_5
SAMD_6
SAMD_7
SAMD_8
SAMD_9
SAMD_10
SAMD_11
SAMD_12
SAMD_13
SAMD_14
SAMD_15
SAMD_16
SAMD_18
Report description
Sec. 1 portfolio analysis part A
Sec.2 Classification of risk assets part A
DSB: Off Balance sheet items.
Sec.3 Change in asset quality profile.
Quarterly Balance
Top Impaired Accounts
Industry wise exposure of NPAs
Zone wise of position of High value NPAs
Asset wise breakup of High value NPAs
Customer NPA Profile
Fresh slippage as on date
Fresh slippage and cumulative postion
NPA accounts fallen below Rs.1 Crore.
Evaluation of High value NPA accounts.
Amount wise breakup of Gross NPA
16
17
18
19
20
21
22
23
24
SAMD_20
SAMD_21
SAMD_22
SAMD_23
SAMD_33
SAMD_36
SAMD_37
SAMD_48
SAMD_49
25
SAMD_50
26
SAMD_53
MENU OPTION NPAMGT (PHASE-II)
Sr.No.
Report name
Description
1
SAMD_REC1
Weekly reduction of existing NPAs
2
SAMD_REC2
Weekly reduction of existing NPAs amt wise
breakup
3
SAMD_REC3
Weekly reduction out of fresh slippage in last FY
4
SAMD_REC4
Weekly reduction out of fresh slippage in last FY
amt wise breakup
5
SAMD_REC5
Weekly reduction out of fresh slippage since last YE
6
SAMD_REC6
Weekly reduction out of fresh slippage since last YE
amt wise breakup
7
SAMD_REC7
Recovery though recovery agents
8
SAMD_SAR1
monthly
return
progress
report
on
recovery/reduction in NPAs for the period
9
SAMD_ SAR2
Monthly return SA II : Summary of enforcement
action as on month end date
10
SAMD_ SAR3
for accounts which are NPA as on statement despite
issuance of notices
11
SAMD_ SAR4
Details
of
financial
assets
sold
to
securitization/Reconstruction
companies/other
Banks/Fis/NBFCs during the Qtr.
12
RBI_M1
Details of borrowal accounts with working capital
limit of Rs.10 crore and above from the entire
banking system
13
SAMD_M2
Details of Primary/ Collateral security ANNEXURE 1
14
SAMD_TWO
Position of HO indentified accounts
15
SAMD_LOSS
Review of loss assets for the half year ended with
the outstanding of Rs. 10 lac and above
16
SAMD_RLEST
Statement of NPA under Real Estate
17
Fresh slippage 5 crore and above during the prev.
SAMD_SLP5C
Qtr.
Non-Performing Assets: Page 97 of 98
18
19
20
21
22
23
SAMD_REUP1
SAMD_OTSWO
SAMD_CSLA
SAMD_RTRC
SAMD_MZCA
24
25
26
27
28
29
SAMD_RPAD
SAMD_RWOA
SAMD_WOPQ
SAMD_HVNPA
SAMD_PDCLA
DATA_INP
SAMD_RCPA