While closing its books of account on 31st March, 2018, a branch of commercial bank finds that: (ii) The outstanding balance of an overdraft account has been continuously in excess of the sanctioned limit of ₹ one lakh s

As per the guidelines of the Reserve Bank of India, an overdraft account is treated as NPA if it remains out of order for a period of more than 90 days. One of the ways, an overdraft account may become out of order is that it remains continuously in excess of the sanctioned limit. In the instant case, the overdraft account has been out of order for more than 90 days. Hence, it is to be treated as NPA.