RBI clarifies norms for upgrading of accounts classified as NPAs
PrintListen to this Article
The Reserve Bank of India on Friday clarified that lenders should reclassify a non-performing asset to “standard” asset only when the entire arrears of interest and principal are paid by the borrower.
The regulator has noted that some lending institutions were upgrading accounts classified as non-performing assets (NPAs) to ‘standard’ asset category upon payment of only interest overdues, partial overdues, etc.
"It has been observed that some lending institutions upgrade accounts classified as NPAs to ‘standard’ asset category upon payment of only interest overdues, partial overdues, etc. In order to avoid any ambiguity in this regard, it is clarified that loan accounts classified as NPAs may be upgraded as ‘standard’ assets only if entire arrears of interest and principal are paid by the borrower," the RBI said.
It has also instructed lenders to mention exact due dates for repayment of loans, the frequency of repayment, breakup between principal and interest, and examples of SMA/NPA classification dates in the loan agreements.
The norms currently say that an amount will be treated as ‘overdue’ if it is not paid on the due date fixed by the bank. The central has observed that currently the due dates for repayments are sometimes not specifically mentioned in the loan agreements, and instead a description of due dates is mentioned, leaving scope for different interpretations.
“Henceforth, the exact due dates for repayment of a loan, frequency of repayment, breakup between principal and interest, examples of SMA/NPA classification dates, etc. shall be clearly specified in the loan agreement and the borrower shall be apprised of the same at the time of loan sanction and also at the time of subsequent changes, if any, to the sanction terms/loan agreement till full repayment of the loan”, the RBI said.
Also, accounts which have availed off the moratorium facility, the exact date of commencement of repayment shall also be specified in the loan agreements, the regulator said.
The RBI has said the lenders have to follow these instructions by December 31, 2021, as far as fresh loans are concerned but in case of existing loans, these instructions should be followed as and when such loans become due for renewal/review.
Category : Income Tax | Comments : 0 | Hits : 1492
If you earn income other than salary or have multiple income streams, the advance tax deadline falling today—Monday, December 15, 2025—should not be overlooked. Failure to pay advance tax on time, or paying less than the required amount, may attract interest charges that continue to accumulate. As the Income Tax Act operates on a “pay as you earn” basis, being aware of advance tax provisions and the financial impact of delays can help you avoid unnecessary costs and last-...
If you earn income other than salary or have multiple income streams, the advance tax deadline falling today—Monday, December 15, 2025—should not be overlooked. Failure to pay advance tax on time, or paying less than the required amount, may attract interest charges that continue to accumulate. As the Income Tax Act operates on a “pay as you earn” basis, being aware of advance tax provisions and the financial impact of delays can help you avoid unnecessary costs and last-...
As many as 5,44,205 appeals were pending resolution with the Income Tax (IT) Department at commissioner (appeals) level as of January 31 this year, and 63,246 at various Income Tax Appellate Tribunals (ITATs), High Courts, and the Supreme Court, FE has learnt. To be precise, the cases pending in ITATs were 20,266 High Courts, 37,436; and Supreme Court 5,544. The large pendency is even as the Central Board of Direct Taxes (CBDT) has laid emphasis on disposing of income tax appeals in its 10...
The Central Board of Direct Taxes (CBDT) has facilitated taxpayers to file their Income Tax Returns (ITRs) for the Assessment Year 2024-25 (relevant to Financial Year 2023-24) from 1st April, 2024 onwards. The ITR functionalities i.e. ITR-1, ITR-2 and ITR-4, commonly used by taxpayers are available on the e-filing portal from 1st April, 2024 onwards for taxpayers to file their Returns. Companies will also be able to file their ITRs through ITR-6 from April 1 onwards. As ...
It has come to notice that misleading information related to new tax regime is being spread on some social media platforms. It is therefore clarified that the new regime under section 115BAC(1A) was introduced in the Finance Act 2023 which was as under as compared to the existing old regime (without exemptions): New Regime 115BAC (1A) introduced for FY 2023-24 Existing old Regime 0-3 lacs 0% 0-2.5 lacs 0% ...
Comments