Bank Promotion Exam Guide 2025-26 PDF

A N Y M A R A S A E Mr DU H SH...

A N Y M A R A S A E Mr DU H SH SA N Y P Mr KS K A A H E A R A DU S H A S AN Y P Mr E A K R A K D US S HA A SH A N P Y Mr r K K U S H A of ASH M Reference E A study R A material for promotion D exercise S A N Y P officers Mr 2025-26 A K R A K U S H A S H A NE Y P Mr r D K S K A S A H M A A U H S N E P R M rD A KS A KA A AY E R U S H S H N P Mr r D K S K A U SA H A Y S H M E A R A D S A A N Y P Mr A K R A K U S H A S H A NE Y P Mr D S A S A H Mr E A K R A K rD U K S H KA S A N Y P M A A E R U S H A S H N P Mr r D K S K A U SA H A Y S H M E A R A D S A N P M r A K A K A Y HAcademyANE R D U S S H A Baroda A S Y P Mr Mr A K A Bank K of Baroda D US S HA A S H E R A N Y P Mr A K R A K NE For internal circulation only D U S S H A A S H A Y P Mr S A H Mr Do Not Print A K E unless extremely A K R required. Saver D U H KSand preserveAKA S A N Y P M Paper, Save Trees A E R S A Mr Environment. U H S H N P r D K S K A U SA H A Y S H M E A R A D S A A N Y P Mrpromotion aspirants. A K R A K S in nature and Apex A H to refer to Book NofEInstructions, SOPs, PCirculars, Mr This booklet is to supplement the learning efforts of the Topics incorporated are D U indicative S H A Academy advises the S readers A Y updated information. S Mr A K guidelines, etc. forAK Master Circulars, Policy D U S HA A S H This bookletNisE focusing mainly on P R the promotion examM r the Bank (basedAon K previous trends)AandK A Y within R by shouldS U not be considered asA H S an instruction manual. HEmployees NE awareness are supposed A P to update themselves Y Mr r D reading Bank’s K S circulars, guidelines and latest K Abanking industry/ S other general A related news. H M A A U H S N E P R M rD A KS A KA S A AY H E P R U H S N r D K S K A U SA H A Y M E A R A D S N P M r A K A Y U S H A S H A NE D S A M r A K A K D US E R A N Y P Mr U S H A S H rD K S KA  A N Y M A R A S A E Mr DU H SH SA N Y P Mr KS K A A H E A R A DU S H A S AN Y P Mr E A K R A K D US S HA A SH A N PY Mr r NPA RECOVERY, K RECEIVABLES K MANAGEMENT U S & STRESSED A H ASSET ASH M E A A R MANAGEMENT D S A N Y P Mr A K R A K U S H A S H A NE Y P Mr r D K S K A& Provisioning S A H M Income Recognition, A A Assets Classification U H S Definitions:N E P R M rD A KS A KA A Y E R An U D S S H Aasset, A S HPerforming whenAitNceases Y P Mr r asset, including a leased K becomes Non K U S H A to generate income for S H M the bank. E A R A D S A OVERDUE:N Any amount due to the P bank under any creditM r is ‘overdue’ if itAis Knot paid on the due A K A Y facility R date U Sthe bank. fixed by H A S H A NE Y P Mr D S A S A H Mr A Non-Performing A K (NPA) is a loan Asset A Kor an advance where: R remain overdue Eand/ or instalment ofPprincipal U r Dfor a period of more S H Kthan 90 days in respect KA S N ofAa term loan. Interest Y M A R A S A H N E P Mr U H S r S D In respect ofKOverdraft/Cash K A(OD/CC), if the account U SA remains “OutHofAOrder” Y as on H S M E A Sheet for reasons R A as given below D Credit S A date of Balance N If the outstanding P r : M in excess E K Asanctioned limit/drawing AK A Y R D U S I. power for H S A balance SH remains A continuously A N of the Y P Mr US continuously operating accountA H 90 days, or Mr II. A K where the outstanding In cases Eof Balance Sheet, orPR sanctioned limit/drawing A K balance in the principal power but there are r D no credits K S for H 90 is less than the days as on K date A S A N Y M interest debited during E A R A D U S III. Credits S H are notA during enough to cover theH A S A N theenough P same period, i.e., turnover Y Mr in the account the current S quarter must be sufficient A to cover the interest H Mr E A K during the sameAquarter. charged R K rD U KS H KA S N P Aaccount may alsoAbeYNPA because of technical M A A say: E R D U S An  Drawing Power S H A S Haccountreasons N A permitted in theAaccount P Y for a H Mr r which isK in case of working capital older than 3 monthsKand irregular drawings U Sare is determined on the basis H of stock statement S M E A period of 90 days. R A D S A  N An account where the P continuous regular/Adhoc credit M r A K withinA K A Y R NE for a periodYof more limit have not been reviewed/renewed 180 D U SIn thedays H from the due S Adate/ date of adhoc H A S sanction. A P than Mr case of bills purchased and discounted, the bill S remains overdue A H Mr 90 days. A K A K Ecrops. of principalPorRinterest thereonM The installment r D U K S H remains overdue for two crop seasons for short K A S A N Y A A R long overdue E duration U SThe H Awith crop installment of principal S H thanremains or interest thereon A N for one crop season P for Mr r D Project LoanK(any duration crops S term loan which K (Crops seasonA longer one has been extended forU Spurpose of settingHupAofYan economic SH year). M A A rD KS the venture) E P R will be classified as NPA: (i) N As per record of recovery (i.e., 90 daysM A A KA S A On account A of Y non-achievement ofH commercial operations.E overdue) and/ or P R U (ii) H S N r D For Infrastructure sector S Within two years fromKthe original Date of Commencement K A U SA Operations (DCCO), H A Y M For Non Infrastructure E A sector RA D of Commercial S N P M r A K A Y U S H A S H A NE D S A M r A K A K D US E R A N Y P Mr U S H A S H rD K S KA  A N Y M A R A S A E Mr DU H SH SA N Y P Mr KS K A A H E A R A DU S H A S AN Y P Mr E A K R KA D U S S H A A S H A N Y P Mr Mr regular as per E Within One year fromK A of recovery. RAK the original Date of Commencement of Commercial D US OperationsS(DCCO) HA even if it is ASH Mr forbymore K K record Namount periods are subjectPto further extension specified However, above A Y RBI. A E of India (Securitization A R ofa S A H N P Mr The of liquidity facility remains outstanding than 90 days, in respect of r DU Standard Assets) securitization K SH Directions 2021. KA transaction undertaken inS terms of the Reserve S A Bank A Y H M In respect A A D U H S the specified dueKA S N Ea derivative contract, P R if these remain unpaidr for a period of 90 days of derivative transactions, the overdue receivables representing A Kfrom positive mark-to-market value of A for payment. AY M E R A S H Nwill be classified Y P if the Mr date D U Ininterest case of interestH S payments in respect of A Soverdue term loans, an account A as NPA Mr Income Recognition A K applied at specified (Income RecognitionA rests K remains for D US more than 90 days. S HA A S H N E P R Policy): r A K K A Y Mbased R A Sshould not charge and Atake to income account H interest on any A NEThis will apply toYGovernment P Mr The policy of income recognition has to be objective and on the record of recovery. Therefore, the D banksU S H A S NPA. S A H Mr However, interest guaranteed accountsK KDeposits, National U A also. A D be taken to income S H S EKisan Vikas Patras P R and Life policiesr may K account on theAdueKA on advances against Term Savings Certificates (NSCs), Indira Vikas Patras (IVPs),N A adequate margin (KVPs) Yis available in the accounts. M A R S date, provided A H N E P Mr U H S r D and commissions K Searned by the banks K U SA or rescheduling Aas a result of renegotiations H A Y H the renegotiated or AS Fees A of outstanding M debts should beE recognized A D S extension of credit. PR r K K on an accrual basis over the period of time covered by rescheduledN A of income Y M A R E the entire interestPaccrued A S A bills purchased S Hdiscounted, becomes NNPA, Mr Reversal U  If any advance, including H D and credited Kto Sincome account in the Apast periods, should be and A Y r K U S reversed if the same H A S H A A is not realized. M E R D S A Mr K K This will apply to Government guaranteed accounts also. A N Y P A A NE R S of NPAs: HA H P Mr Asset Classification D U Categories S A S A Y S following three categoriesA based on SH Mr the period for which A Kclassify Non-performing A Knonassets U H Banks are required to further into the N E Assets PR the asset has remained M rD performing and the realisability A KS of the dues: A KA A Assets AY Substandard E R S H N P Mr Doubtful U H S D S A SA Y Loss Assets r A K K U H A S H M Substandard E R A D S A Mr which has remained K NPA for a periodAlessK Assets: N 31st March 2005, aP A A With effect from Sub Standard asset is one, Y E over dues are recovered R Srecovery measuresHareArelevant in Sub Standard H Assets also. IfAtheNentire P Mr than or equal to 12 months. U Dway of cash recovery, All the Sthe account can beKA S Y upgraded to StandardScategory immediately. A r by M account is classified A K A D U shall be upgraded S H on clearance of ASH Similarly, if an E R Mr AK K as NPA due to technical reasons, the account A N technical reasons. Y P A be considered in Sub Standard advancesE R Son objective assessment/ A appraisal observing Hextant guidelinesAandNnorms. P Mr Restructuring/ Rehabilitation may in case turnaround is possible D basedU S H A S Y r K K U S H A S H M Doubtful Assets: A A N EMarch 31, 2005, anPasset M r D if it remained inAthe R is classified as doubtful, KS A KA A of 12 months. AY With effect from substandard category S for a period H N E P R U H S r AD K S has all the weaknesses K A inherent in assets U SAthat were classified H A Y A A loan classified as doubtful as substandard, M with the addedEcharacteristic R that the weaknesses r D make collection or liquidation in S K full, – on the basis of A N currently known facts, conditions Y P and values – highly M questionable and A improbable. E D US S HA A SH A N S Mr E A K R A K r D U A N Y P M U S H A S H rD KS KA  A N Y M A R A S A E Mr DU H SH SA N Y P Mr KS K A A H E A R A DU S H A S AN Y P Mr E A K R A K D US S HA A SH A N YP Mr r K K S U Branches should,Showever, H A H M All the recoveryE measures A are relevant A for Doubtful Assets D envisage AS whether it isNadvisable to restructure/ P Rrehabilitate the Unit.rLooking to Promoters’ also. A Ksincerity, wherewithal, K capabilityA Y Mobjective assessment, A U Sit would be worthwhile to achieve a turnaround, H A to commit additional Hfinance after ascertaining and also based on the S A branches PR NE real factors thatYcontributed should decide Mr r Dsickness of the Borrower. whether K S [ K A S A H M to A A U H S N E rehabilitation is P If the restructuring/ notR M r Dsuch as Compromise/ possible, recovery action A KS OTS / action under A KA A Act/ legal action etc., AYis to be considered. E R S H N P Mr SARFAESI U H S r D Assets: KS K A U SA H A Y H auditors or in the RBI AS Loss M A Loss Asset isEoneAwhere loss has been Aidentified by the bankD Rwritten off wholly. r or internal or externalS K K inspection but A N the amount has not been Y P M A A E R D U If the S realisable value of the S H A security, as assessed A S Hby the bank/ approved A Nvaluers/RBI Y P 10 per is less than Mr S should be ignored A and the asset SH Mr should be straightaway Kinclassified K the existence ofU H cent of the outstanding the borrowal accounts, security A as LossAAsset. In other words, E value that its continuance R as a bankable rasset S D is not warrantedKalthough there uncollectible A K such an asset is considered and of suchN A little Y P M A A may be E R S A H N P Mr some salvage or recovery value. U H S r D K S K A U SA H A Y H investment in AS Asset Classification to be Borrower-wise and not Facility-wise M It A is difficult to envisage A a situation when onlyD S i) N Eany of the securitiesPissued R by the borrowerrbecomes a problemAcredit/investmentK one facility to a borrower/one K A Y M E R A and not S Aissued by the borrower H will have to beAN P not the Mr others. Therefore, all the facilities granted by a bank to a borrower and investment in all D U S H the securities A S treated as NPA/NPI and Y Mr A K particular facility/investment A K or part thereof which D UShas become irregular. S HA A S H ii) NEAdvances under Consortium R A Asset classificationY P Mr should be based Arrangements: A K R A K S of the individualHmember A banks and other NE on the recoverability H aspects having aAbearing P of the Mr of accounts under consortium on the record of recovery D U S A S Y Sconsortium lendingHarrangements A H Mr KWhere the remittances K by the borrower under U S advances. are pooledAwith one bank and/or A S books of the otherKA Nof E other member banks, P R account will be treated the M r D as not servicedAinKthe where the bank receiving remittances is not parting with the share A A member banks and Ytherefore, be treated as NPA. The banks E R S A H N from the leadYbank or get P Mr participating in the consortium D U should, S H arrange therefore, A Sshare to get their A of recovery transferred S A to ensure SH Mr K K U H an express consent from the lead bank for the transfer of their share of recovery, properA asset classification inA D S A N E P R r their respective books. A K K Awhere there is Erosion M Y in the Value ofHSecurity/Frauds Borrowers: R E onby account A S A N of P Mr Accounts committed D U S H In respect of accounts A where there are S A potential threats for recovery Y erosion in S A H Mr K by borrowers. InAcases K of such seriousUcredit impairment, theHasset should be AS the value of security or non-availability of security and existence of other factors such as frauds A D S E asR doubtful or loss assetr as appropriate: K K committed N classified P A straightaway Y M A R A U S a) Erosion in the H Avalue of security canSbe H reckoned as significant A NEwhen the realisable P Y by RBI at H Mr r D K Sis less than 50 perKcent A of the value assessed S by the bank or accepted A value of M the security A of last inspection,RasA the case may be. D U S H classified AS E the time Nunder doubtful category. P M r K Such NPAs may be straightaway A A K A S b) If the realisable AY Has assessed by AtheNbank/ E approved valuers/ P RRBI is D U H Sper cent of the outstanding S A in the borrowal value of the security, Y of security r less thanK10 K U S accounts, the existence H A M shouldA A should be straightawayD Sasset. N E be ignored and the asset P R r K classified as loss A A Y M E D US S HA A SH A N S Mr E A K R A K r D U A N Y P M U S H A S H rD KS KA  A N Y M A R A S A E Mr DU H SH SA N Y P Mr KS K A A H E A R A DU S H A S AN Y P Mr E A K R AK D U S S H A A S H A N Y P Mr Mr Advances against Term A K Deposits, NSCs, A KKVPs/IVPs, etc. US HA S H E term deposits, NSCs R eligible for surrender, D S A N Advances against treated asA Y P Mther accounts. A IVPs, KVPs and life K policies need notAbeK E against gold ornaments, R S A H N P Mr NPAs, provided adequate margin is available in Advances D U government securities S andHall other securities A S are not covered by this A exemption. Y r K K U S H A S H M Agricultural advancesA A N E P R M rD A KS A KA A AY: E R U S H S H N P Mr D norms for shortKterm S & long term cropsKare A as per the below table SA: Y IRAC norms for Agri advance r IRAC A U H A S H M Sl. Cropping E R A D S A Mr K K Crop cultivation Repayment due date(fixed) No. A Npattern P (Loan disbursement) Y A A E the first disbursement R S A round the year asSH Nfrom P date in Mr period 1. U Short Term All H A D S A Maximum 12 months Y Mr A Crops (Upto K per crop needs AK case USafter renewal of new accounts withdrawalD or maximum 12Amonths from first H S H loan in case A of S N E 12 months) P R r date A K of crop K A Y M renewed accounts (to be synchronized E A of with harvesting R S A H N P Mr crop) U S H S D2. Long TermK All round the yearKAas Maximum 18 months A Y S from the first disbursement A date in H Mr Crops A E per crop needs A R r case of new D U accounts or K maximum S H 18 Kof months from the A S A N than 12 (More Y P M accounts. first withdrawal A date after renewal A of crop loan in case NE R S A H P Mr months) renewed D U S H A S A Y Mr A K A K D US S HA A S H N Edue date, IRAC norms, P R Agriculture Interestr subvention and Other A K Parameters for Short K A The Repayment Y M R A U S Term Crop Loans Term/Long H Aunder BKCC Scheme S Hare given below: ANE Y P Mr D S A SLong Term Crop HA H MrSr. Particulars A K Short TermK R A Crop U r D CC025 AKS KA S SchemeE P 1 N A Date Code CC003 Y M R A 2 S Sanction 3 U Repayment due date A 01.04.2020 H N E 01.04.2020 P Mr D H S (Maximum 12KA 31.03.2021 S A 30.09.2021 S(Maximum Yfrom the first H r K U H A A A date in caseDof disbursement date in case of newAS months from the 18 months M E R S Mr K withdrawal dateAafter K first disbursement N newP A Y accounts or first withdrawal A accounts or first R S A H NE P Mr date after renewal of crop loan) renewal of crop loan) 4 U Date of overdue H 01.04.2021 S A D S A 01.10.2021 Y Mr 6 InterestEApplication 5 Date of NPA K A 31.03.2023 K At simple A D US31.03.2023 S HupA to 30.09.2021ASH N and P R rat half and thereafter interest up to 31.03.2021 K compounding atAhalf At simple interest A K A Y thereafter compounding M rests,if not paid before due yearly E R date S Ayearly H Nrests, if not paid before P Mr due D U H S Up to 31.03.2021 S A A or actual date of SAs per RBI guidelines, Y interest H A date M r 7 SubventionA Agri K interest K Awhichever is earlier, U H S E payment R r D K S for short term subvention is available K A A N Y P to maximum period M of 12 crop loans.A A subvention will R subject Hence, interest subvention S A months. H and E N under this category. prompt P not be D U S H A S A Y USFrom 01.10.2021SHA available Mr 8 Charging E of K A Normal From 01.04.2021 R A K D P Mr K Rate of Interest A N Y A U S H A S H A NE D S A M r A K A K D US E R A N Y P Mr U S H A S H rD K S KA  A N Y M A R A S A E Mr DU H SH SA N Y P Mr KS K A A H E A R A DU S H A S AN Y P Mr E A K R A K US HA SH A N P Mr D S A S AY H Mr Government Guaranteed E A K Advances R AK r DU K S H K A S A N Y P of the CentralM A A NPAU S when the Government The credit H A repudiates its guarantee facilities backed by guarantee S H when invoked.AThis Government though NEexemption fromYclassification overdue may be PR treated as Mr r DGovernment guaranteed only K S advances as NPA K Ais not for the purposeSof recognition of income. A H of M The requirement A A U H S E r D exposures. RState Government guaranteed KS KA of invocation of guarantee has been delinked for deciding the asset classification and provisioningN requirements in respectP of M A A WithU SAfrom the year ending H AYMarch 31, 2006 S H Government guaranteed N E advances and investments P R Mr inDState GovernmentKguaranteed S SA A attract asset classification Y norms if H effect State r securities A or any other amount K would U H A and provisioning S M interest and/orEprincipal R A due to the bank remains D S A Mr K K overdue for more than 90 days. A N Supplier's Credit:Y P A R A S Acredit extended byStheHbanks covering export NE of goods to countriesP Mr Post-shipment 1) InU H D respect of post-shipment S A S A A Y for which H Mr guarantee-cum-refinance K Programme whereby, K in the event of default, U H S the Export Credit Guarantee Corporation’s (ECGC) cover is available, EXIM Bank has introduced a A A D invokes the guarantee S E within a period ofP30Rdays from the dayMther bank K after the exporter KA EXIM Bank will pay the guaranteed amount to the has filed A N bank Y A R A S claim with ECGC. A H from the EXIM N E P Mr D U 2) Accordingly, to the S H extent payment has beenS A received A Bank, the advance may Y not be S A H Mr K K U H S treated as a non-performing A asset for asset classification and provisioning purposes. EFinance R A D S A Export Project N P M r A K A K A Y E R S A in turn is unable S to H remit the amount dueN Psuch as Mr 1) In respect of export project finance, there could be instances where the actual importer has paid the dues D U to the bank abroad but theH S bank A A to political developments Y S A H Mr 2) In such cases, K Kis able to establishUthrough Hevidence that the AS war, strife, UN embargo, etc. A A E the dues in fullPbyRdepositing the amount D S r in the bank abroadAbefore K it turned into NPA AK where the lending bank documentary importer hasN A cleared of the bank, but theYimporter's country is not Mallowing the fundsEto be remitted due to political R Sreasons, the assetHclassification A H after a period ofAone N year from the dateYthePamount Mr in the books D U or other S may be S A made S A H Mr was deposited by theK K A importer in the bank abroad. A U H S Credit CardN E Accounts P R M rD A KS A KA Acard accounts, theAamount Y spent is billedHto the card users through E a monthly statementR S N P Mr 1) In credit with a D U of it, i.e., minimum definite due date for S H repayment. Banks give A an Sdate and roll-overStheAbalance amount toAtheYsubsequent option to the card users to pay either the full amount or a H Mr months’ billingEcycle. AK K U H S fraction amount due, on the due A Ras non-performing asset D S A N P r if the minimum A K due, as mentioned AK is not paid fullyYwithin 90 days from theM 2) A credit card account will be treated amount A payment due date E R S shall report a credit Acard account as ‘past Hdue’ to credit information N companies (CICs) P or levy Mr in the statement, mentioned in the statement. D U 3) Banks S H A S if any, only when a S A Y A ‘past due’ H Mr for more than EthreeAK K U credit Hshall, however, be AS penal charges, viz. late payment charges, etc., card account remains days. The number of R A ‘days past due’ and D late S Mr card statement.E AK K payment charges computed from A N the payment due date Y P mentioned in the credit A R S A H N P Mr Provisioning Norms: U D primary responsibility i. General H S for making adequate S Aprovisions for any S A diminution in the valueA Y r The A K A K U H of loan assets, S H M investment or otherE the time lag between R an account becoming assets is that of the bank managements and r D doubtful of recovery, the statutory KS its recognitionAasKA auditors. Taking into N such, theA account P M A the U S realization of theHsecurityAYagainst and the erosion over time in the value ofEsecurity charged to the S H assets, doubtfulAassets N and loss assetsYasPbelow. Rbank, DLoss Assets KS banks should make provision KA substandard S A