Calculate the total provision required in respect of the NPA Loan Account of XYZ Ltd at M/s ABC Bank as on 31.03.2024: Loan outstanding balance ₹ 4 lakhs. ECGC Cover 50 percent. Period for which the advance has remained

Provisions required to be made by the Bank: Particulars Amount (In ₹) Loan Outstanding balance 4.00 Less: Value of Security held 1.50 Unrealised Balance 2.50 Less: ECGC Cover (50% of Unrealisable Balance) 1.25 Net Unsecured Balance 1.25 Total provision to be made as on March 31, 2024 ₹ 1.25 Lakhs + ₹ 0.60 Lakhs = ₹ 1.85 lakhs Working Note: For an NPA loan account that is more than 2 years overdue, banks need to maintain a provision of 100% of the outstanding loan amount, minus the realizable value of security held. Provision for unsecured portion of advance [@ 100% of unsecured portion] = ₹1.25 lakhs Provision for secured portion of advance as on March 31, 2024 [@ 40% of the secured portion] = ₹0.60 lakhs