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AmitAmit asked 12 months ago

Is asset classification and income recongnition is same for bank audit chapter and nbfc chapter.

1 Answers
RaviRavi Staff answered 12 months ago

Difference between Bank and NBFC
Shortcut used
NBFC-D—–NBFC accepting deposits (Highly regulated always under radar and strict regulations)
 
NBFC-SI-ND— NBFC systematically important but not accepting deposit (Again highly regulated because of size, just like above)  
 
NBFC-ND — NBFC not accepting deposits and not systematically important (not big, no public deposits, less regulated)
 
1. NPA Criteria


Bank generally has 90 days time limit

NBFC-D & NBFC-SI-ND — 3 months

NBFC-ND — 6 months (if its hire purchase or lease rentals tenure goes up to 12 months)
 
2. NPA Categories
 
In bank sub standard asset tenure is 12 months
 
In NBFC sub-standard time limit for sub-standard
 
NBFC-ND is 18 months
 
NBFC-D & NBFC-ND-SI is 12 months
 
3. Provision Rates (Secured)
 
Bank
 
Standard / Sub Standard / Doubtful 1 years / Doubtful 1-3 years / Doubtful more than 3 years
 
0.40 % (Agri 0.25% & SME) / 15 %  / 25 %  / 40 % / 100 %
 
 
NBFC
 
Standard / Sub Standard / Doubtful 1 years / Doubtful 1-3 years / Doubtful more than 3 years
 
0.40% ( For NBFC-ND 0.25%) / 10 % / 20% / 30% / 50%
 
4. Provision Rates (Unsecured)
 
Bank
 
Substandard / Doubtful
 
25% / 100%
 
NBFC
Substandard / Doubtful
10% / 100%
 
This much comparison is sufficient

RaviRavi Staff replied 12 months ago

So basically every where for NBFC-ND there is soft corner, they are pampered

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