While closing its books of account on March 31st of a financial year, a Non-banking Finance company has its advances classified as follows: Particulars ₹ Lakhs (i) Standard Assets (Other standard loans including Medium E
CS Professional · Banking and Insurance - Laws and Practice · PYQS · June 2024
While closing its books of account on March 31st of a financial year, a Non-banking Finance company has its advances classified as follows: Particulars ₹ Lakhs (i) Standard Assets (Other standard loans including Medium Enterprises) 16,800 (ii) Sub-Standard Assets (Secured) 1,340 (iii) Secured Positions of Doubtful Debts: (a) UP to one year 320 (b) One year to three years 90 (c) More than three years. 30 (iv) Unsecured Portions of Doubtful debts 97 (v) Loss Assets 48 Calculate the amount of provision which must be made against the advances.
Answer & Explanation:
Calculation of Provisions against the advances of Non-Banking Finance Company: Particulars Loan (₹ Lakhs) Provision (%) Provision (₹ Lakhs) Standard Assets 16,800 0.40% 67.20 Sub-Standard Assets 1,340 10.00% 134.00 Secured Portion of Doubtful Debts: Up to One Year 320 20.00% 64.00 1 Year to 2 Years 90 30.00% 27.00 More than 3 Years 30 50.00% 15.00 Unsecured Portion of Doubtful debts 97 100.00% 97.00 Loss Assets 48 100.00% 48.00 Total Provision 452.20
Topics: Non-Banking Financial Companies (NBFCs)
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