While closing its books of account on 31st March, 2018, a branch of commercial bank finds that: (iii) ₹75,000, the amount of discounted bill was due on 17th February, 2018 but the same has not been received and the bill

CS Professional · Banking - Law and Practice · PYQS · June 2018
While closing its books of account on 31st March, 2018, a branch of commercial bank finds that: (iii) ₹75,000, the amount of discounted bill was due on 17th February, 2018 but the same has not been received and the bill was dishonoured. Explain with reasons which of the abovementioned credit facilities will be treated as NPA on 31st March, 2018.

Answer & Explanation:

As per the relevant guidelines of the Reserve Bank of India, bills purchased and discounted are treated as NPA if they remain overdue and unpaid for a period of more than 90 days. In the present case, the discounted bill has not yet remained overdue for more than 90 days. Hence, it is not to be treated as NPA.

Topics: Banking Law and Practice

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic