BFM Module D - Asset Classification & Provisioning Norms PDF
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Uploaded by TemptingIolite861
2024
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Summary
This document contains a set of questions from a CAIIB BFM module exam, specifically covering asset classification and provisioning norms. It includes questions and solutions concerning provisions for various assets classes and factors considered in prompt corrective action.
Full Transcript
Join CAIIB WITH ASHOK on YouTube & App BFM MODULE - D Chapter 28: Asset Classification and Provisioning Norms (PART-III) What we will study? *Case Study based on NPA Provisining? Join CAIIB WITH ASHOK on YouTube & App Case Study: On the year ende...
Join CAIIB WITH ASHOK on YouTube & App BFM MODULE - D Chapter 28: Asset Classification and Provisioning Norms (PART-III) What we will study? *Case Study based on NPA Provisining? Join CAIIB WITH ASHOK on YouTube & App Case Study: On the year ended 31st March, 2024 a bank had following advances: Assets Classification Outstanding Secured (out ₹ (Cr.) of total amt) Standard 200 20 Substandard 100 5 Doubtful up to one year 50 20 Doubtful for one year to three 120 100 years Doubtful for more than three years 60 40 Loss 30 30 Ques 1: How much provisioning bank needs to make for Standard Assets? a. 0.10 Cr. b. 0.50 Cr. c. 0.80 Cr. d. 0.06 Cr. Join CAIIB WITH ASHOK on YouTube & App Ques 2: How much provisioning bank needs to make for Sub- Standard Assets? a. 20 Cr. b. 25 Cr. c. 60 Cr. d. 35 Cr. Ques 3: How much provisioning bank needs to make for Doubtfull Assets up to one year? a. 20 Cr. b. 25 Cr. c. 60 Cr. d. 35 Cr. Ques 4: How much provisioning bank needs to make for Doubtfull Assets from one year up to three years? a. 20 Cr. b. 25 Cr. c. 60 Cr. d. 35 Cr. Ques 5: How much provisioning bank needs to make for Doubtfull Assets for more than three years? a. 20 Cr. b. 25 Cr. c. 60 Cr. d. 35 Cr. Join CAIIB WITH ASHOK on YouTube & App Ques 6: How much provisioning bank needs to make for Loss Assets? a. 20 Cr. b. 25 Cr. c. 60 Cr. d. 30 Cr. Ques 7: Amount of total provision by bank for the bad debts will be? a. 210.8 Cr. b. 250.8 Cr. c. 200.8 Cr. d. 220.8 Cr. Ques 8: Which of the following factors are considered while making decision regarding Prompt Corrective Action (PCA) by RBI? (i) CRAR or CET 1 ratio. (ii) Asset Quality. (iii) Return on assets (ROA). (iv) Tier 1 Leverage ratio. a. Only (i). b. Only (i) and (ii). c. Only (i), (ii) and (iii). d. (i),(ii),(iii) and (iv). Join CAIIB WITH ASHOK on YouTube & App Ques 9: When a bank need to make accelerated provisioning? (i) Where banks fail to report SMA (Special Mention Accounts) status of the accounts to CRILC. (ii) Where banks resort to methods with the intent to conceal the actual status of the accounts (iii) Where banks try to evergreen the account. a. Only (ii). b. Only (i) and (ii). c. (i), (ii) and (iii). d. Only (ii) and (iii). Ques 10: Asset classification of accounts under consortium should be based on? a. If account become NPA then it will be treated as NPA by all banks. b. Individual member banks can mark the account as NPA as per the record of recovery. c. Individual member banks can mark the account as NPA as per their policy. d. None. Join CAIIB WITH ASHOK on YouTube & App Solution: Q1. c. 0.80 Cr. = 200* 0.4% = 0.8 Cr. Q2. b. 25 Cr. = unsecured (25%) = 100*25% = 25 Cr. Q3. d. 35 Cr. = secured (25%) and unsecured (100%) = 20*25% + 30*100% = 35 Cr. Q4. c. 60 Cr. = secured (40%) and unsecured (100%) = 100*40% + 20*100% = 60 Cr. Q5. c. 60 Cr. = secured (100%) and unsecured (100%) = 40*100% + 20*100% = 60 Cr. Q6. d. 30 Cr.= 100% of total outstanding = 30*100% = 30 Cr. Q7. a. 210.8 Cr. = 0.8 Cr. + 25 Cr. + 35 Cr. + 60 Cr. + 60 Cr. + 30 Cr. = 210.8 ₹. Q8. d. (i),(ii),(iii) and (iv). Q9. c. (i), (ii) and (iii). Q10. b. Individual member banks can mark the account as NPA as per the record of recovery. Join CAIIB WITH ASHOK on YouTube & App Asset Classification Provisioning (%) Sub-standard (secured) 15% Sub-standard (unsecured) 25% Sub-standard (unsecured) 20% Infrastructure loans Doubtful I Secured portion 25% (Up to 1 year) Unsecured portion 100% Doubtful II Secured portion 40% (1 year + & Up to 3 years) Unsecured portion 100% Doubtful III Secured portion 100% (3 year +) Unsecured portion 100% Loss 100% Join CAIIB WITH ASHOK on YouTube & App Provision Calculation: Assets Classification ₹ (Cr.) Secured Provision (out of total amt) Standard 200 20 0.8 Substandard 100 5 25 Doubtful up to one year 50 20 35 Doubtful for one year to three 120 100 60 years Doubtful for more than three 60 40 60 years Loss 30 30 30 Total Provision = 210.8
