Master Circular: Income Recognition, Asset Classification, Provisioning, and Other Related Matters for UCBs
This master circular outlines the guidelines for Urban Co-operative Banks (UCBs) on income recognition, asset classification, provisioning, and other related matters.
Non-Performing Assets (NPA)
Assets are classified as NPAs if principal or interest payment is overdue for 90 days or more. Agricultural advances are considered NPAs if the installment is overdue for one crop season or more.
Identification of NPAs should be done on an ongoing basis, and interest should be charged at monthly rests. Large exposures should be reported to the Central Repository of Information on Large Credits (CRILC).
Special Mention Accounts (SMAs) are categorized into two sub-categories:
SMA-0: Outstanding balance remains continuously in excess of the sanctioned limit or drawing power, whichever is lower, for a period of 61-90 days.
SMA-1: Outstanding balance remains continuously in excess of the sanctioned limit or drawing power, whichever is lower, for a period of 31-60 days.
SMA-2: Outstanding balance remains continuously in excess of the sanctioned limit or drawing power, whichever is lower, for a period of 1-30 days.
Treatment of Accounts as NPAs
Accounts are treated as NPAs if they are overdue for 90 days or more. The classification of NPAs is based on the record of recovery.
Provisioning Requirements
UCBs are required to make provisions for NPAs as per the provisioning norms.
Disclosure Requirements
UCBs are required to disclose the NPAs, provisioning, and other related information in their financial statements.
Chat with the Master Circular: