Prudential Norms on Income

Recognition ,Asset Classification &

Provisioning of Advances

AKOLA Br of WIRC of ICAI

18th March2017

1
CA Nitin S Bangad
Partner
S M Bangad & Co
Chartered Accountants
Aurangabad & Mumbai
 Agenda
Discussion on Master Circular (MC) issued by RBI on
IRAC Norms covering
a) Asset Classification
b) Provisioning
c) Income recognition
d) Project Loans
2 e) Case Studies
f) Restructuring of Advances
 Introduction
The system of NPA classification was introduced by RBI for the banks
w.e.f 31/03/1993.
Master Circular (MC) issued by RBI every year, however not in 2016 so
the MC dtd 1st July, 2015 is relevant
One of the most important areas in bank audit, consuming major time
of the auditors.
Identification & Classification of NPA is claimed to be system driven,
however appropriate checks of the parameters needs to be made.
3
Inspite of use of technology & quarterly classification by the bank, no
decrease in MOC’s by statutory auditors at the year end.
Primary responsibility of making proper NPA classifications &
provisioning is of the bank management & statutory auditors.
 Introduction Contd …
•Position of Gross NPA’s as per RBI
Rs in Crores
Particulars 31st March, 2015 31st March, 2016
SBI & Associates 73508 121969
Private Banks 33361 56185
Other Nationalized Banks 204960 417988

Total 311829 596142

(Source : RBI website database on Indian Economy)
4
• Further Increase in NPA during the current year.
 Asset Classification… Basic Concepts
Standard Assets:- An asset which is not NPA & which does not carry more than the
normal risks attached to the business.
Further bifurcation of Standard accounts is required in certain cases

Non Performing Assets :- An asset is treated to be non performing when it ceases to

generate income for the bank.
Ceases to generate income if the interest charged in an account is not realized within
the prescribed time without considering the security available

Categories of NPA
5 Substandard:- An NPA for the period of less than or equal to 12 months from the
date of NPA
Doubtful :- An NPA for a period more than 12 months from the date of NPA. Even
accounts with serious credit impairment / no security below 12 months.
Loss :- Account identified as uncollectible with negligible salvage or recovery value &
not written off in the books.
 Asset Classification… Basic Concepts
Out of Order :-
An account will be treated as “out of order” if the outstanding balance in the account
is over the sanctioned limit / DP continuously for more than 90 days.
Even if the outstanding balance is below the sanction limit, but the credits in the
account are not sufficient to cover the interest debited, or as on the Balance Sheet
date there are no credits during the last 90 days, still the account is considered as “out
of order”.

Over due :
Any amount due to the bank not paid on the due date is considered to be overdue.
6
Three aspects for checking of NPA
a) Fresh Identification
b) Proper Movement of classification from one category of NPA to another.
c) Upgradation of loan accounts earlier classified as NPA.
 Guidelines on Asset Classification
Availability of security or net worth of the borrower / guarantor should
not be considered while classifying the account.
Classification of account should be based on the record of the recovery
& an account should not be classified as NPA merely for temporary
deficiencies such as non receipt of stock statement, non renewal of limits,
balance outstanding exceeding the limits/ DP, etc. However, the
following would be treated as NPA
a) DP allowed on stock statement older than 3 months & such irregular
drawings permitted for more than 90 days.
7 b) Limits not reviewed / renewed within 180 days from the due date.
c) Outstanding in the account continuously above the DP/limits
The asset classification should be borrower wise and not facility wise,
except in certain cases such as loans to PACS, bills discounted under LC,
etc.
 Guidelines on Asset Classification ……Contd…
Borrower wise NPA classification does not extend to the group concerns & the
classification status of each entity in the group needs to be identified separately.
Advances against TDR’s / KVP/IVP, LIC Policies should not be treated as
NPA if sufficient margin is available. Advances against gold ornament / Govt.
securities to be classified as per regular norms.
For advances where moratorium for payment of interest is given, the interest
becomes due only after the end of the moratorium period & hence the account
should not be treated as NPA if the interest is not serviced when debited to the
account.
8 Where there is substantial erosion in the value of security (by more than 50%)
account needs to be directly classified as doubtful. Where the value of security is
less than 10% of the outstanding amount account to be classified as Loss.
In case of frauds entire amount due to the bank / amount for which the bank is
liable (without considering the value of security) to be provided.
 Fresh identification of NPA
Loans with Fixed repayment period ie Term Loans/ Demand loans/ Personal
loans :- A loan is treated as a non-performing asset (NPA) if interest and/or
instalment of principal remain overdue for a period of more than 90 days
As per Para 2.1.3 of the MC, “In case of interest payments, banks should, classify an
account as NPA only if the interest due and charged during any quarter is not serviced
fully within 90 days from the end of the quarter”
E.g. :- If interest is charged in a TL A/c. on 31st Oct, 2016 & if the interest is not
serviced within 90 days from 31st Dec, 2016 then only the TL A/c. would be
treated as NPA not otherwise.

Cash Credit / Overdraft :- A cash credit or overdraft account is treated as NPA

9 if it remains out of order for a period of 90 days or more.

Credit Card :- To be treated as NPA, if the minimum amount due as shown in

the statement is not paid within 90 days from the due date as given in the
statement.
 Fresh identification ……Contd…
Bills purchased & Discounted :- Bills purchased and discounted are
treated as NPA if they remain overdue and unpaid for a period of more
than 90 days.

Securitisation:- The asset is to be treated as NPA if the amount of

liquidity facility remains outstanding for more than 90 days, in respect of
a securitisation transaction undertaken in terms of guidelines on
securitisation dated February 1, 2006

Agricultural Advance :- A loan granted for short duration crops will be

10 treated as NPA, if the installment of principal or interest thereon remains
overdue for two crop seasons and, a loan granted for long duration crops
will be treated as NPA, if the installment of principal or interest thereon
remains overdue for one crop season
(Note :- Above norms applicable only to direct agricultural advances & for indirect
agricultural advances regular norms would continue)
 Fresh identification ……Contd…
Govt. Guaranteed Advances :- The credit facilities backed by Central Govt.
guarantees to be treated as NPA only when the government repudiates its
guarantee when invoked. In case of State Govt. guarantees no special treatment.

Advances under Consortium :- Classification of consortium advances should be

based on the records of recovery of the individual bank & should not be guided
by the classification of the other banks in the consortium.

Post shipment suppliers credit :-The portion of advances which is guaranteed by

11 EXIM bank need not be treated as NPA.

Export Project Finance :- If the importer has paid the amount, but due to
political reasons the bank abroad is not able to remit the funds, which is
established by documentary evidences then account need not be classified as
NPA up to a period of 1 year from the date of deposit by importers bank.
 Fresh identification ……Contd…
Advances to PACS / FSS :- In case of advances granted under the on-lending
system, only the particular credit facility granted to PACSs or FSSs, which is in
default for a period of two crop seasons in case of short duration crops and one
crop season in case of long duration crops, as the case may be, after it has
become due will be classified as NPA and not all the credit facilities sanctioned.
The other direct loans & advances, if any, granted by the bank to the member
borrower of a PACS/ FSS outside the on-lending arrangement will become NPA
even if one of the credit facilities granted to the same borrower becomes NPA.
Advance under Rehabilitation of BIFR/ Term Lending Institutions, etc. :-
12 Even after rehabilitation the existing asset classification to continue.
Upgradation of classification only after one year of satisfactory performance.
For additional facilities sanctioned under package, IRAC norms to be
applicable after one year.
 Demonetization- Effect on asset classification
Consequent to demonetization RBI has issued two circulars dtd 21/11/16 &
28/12/16, having effect on asset classification as on Mar-17.
The above circulars provide that an additional period of 60/90 days beyond the
applicable time to be provided to the following borrowers for recognizing a
account to be substandard.
a) Running working capital accounts (OD/CC)/crop loans, with any bank, the
sanctioned limit whereof is Rs. 1 crore or less;
b) Term loans, whether business or personal, secured or otherwise, the original
sanctioned amount whereof is Rs. 1 crore or less, on the books of any bank or any
NBFC, including NBFC (Micro Finance Institution). This shall include housing
loans and agriculture loans;
13 c) Loans sanctioned by banks to NBFC (MFI), NBFCs, Housing Finance Companies,
and Primary Agriculture Credits and by State Cooperative Banks to District Central
Co-operative Banks.
d) The above guidelines will also be applicable to loans extended by DCCBs.
e) The limits at (a) and (b) above are mutually exclusive limits applicable to respective
categories of loans
 Demonetization- Effect on asset classification
The above guidelines are subject to the following conditions
It would apply to dues payable between November 1, 2016 and December 31,
2016.
It is also clarified that the aforesaid guideline is a short-term deferment of
classification as substandard due to delay in payment of dues arising during the
period specified above and does not result in restructuring of the loans.
Dues payable before November 1 and after December 31, 2016, will be covered
by the extant instruction for the respective RE with regard to recognition of NPAs.
The additional time given shall only apply to defer the classification of an
existing standard asset as substandard and not for delaying the migration of an
14 account across sub-categories of NPA.
The effect of the above would be that the eligible borrowers would get
additional time for payment of dues of Nov & Dec16 by 60/90 days.
 Fresh Identification of NPA’s – How ?
Check if all accounts of the borrower are tagged under a single customer ID
Position of the branch as of the last quarter / month as available.
Loan balance file / CC/OD balance file if available in soft form can be taken
and analysed.
List of SMA accounts reported to higher authorities.
For crop loans to confirm if the area of the branch is covered under any natural
calamity.
Care / caution to be taken for ever greening in the accounts such as.
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•Cash deposit shown without actual cash receipt (Agri. Loans)
•Cheque purchase shown at the year end but returned in the next year.
•Transfer from sister concerns accounts.
•Recoveries from new limits sanctioned.
 Movement of existing NPA’s to other categories
Copy of last years audited classification & MOC to be taken.
Check if old NPA’s properly classified based on the NPA date.
Valuation of securities as per prescribed norms of 3 years.
Shifting of NPA accounts from one category to another, based on
severe credit impairment or heavy erosion in the value of security.

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 Upgradation of NPA’s
Upgradation of current years NPA & previous years NPA to be
thoroughly checked.
Upgradation of loans (other than re-structured) to be done only after
recovery of full arrears of principal & interest due & not the critical
amount due. The status of the account should be “No overdue” instead
of “Overdue within 90 days”.
Upgradation within the NPA category is not permitted i.e. a Doubtful
account cannot be made Sub-standard even if the overdue are reduced to
less than 12 months.
Agri. Advances affected by natural calamities.
17 Banks to decide on their own regarding measures to be taken for
conversion of short term loans or re-schedulement of repayment period &
sanctioning of fresh short term loans subject to guidelines of RBI.
In cases of conversion or re-schedulement, the term loan as well as fresh
short-term loan may be treated as current dues and need not be classified
as NPA.
 Provisioning Norms
Standard Asset Farm Agricultural and SMEs 0.25 %
Commercial Real Estate (CRE) 1.00 %
(CRE) Residential Housing 0.75 %
All Others not included above 0.40 %
Housing Loans (Teaser) 2.00%
Sub Standard Asset Outstanding (secured) 15.00 %
Outstanding (Unsecured ) 25.00%
Bad & Doubtful Asset Doubtful I – upto 1 year (Secured Portion) 25.00 %
Doubtful II – 1 to 3 years (Secured Portion) 40.00 %
Doubtful III – more than 3 years 100.00 %
Unsecured Portion of all I, II 100.00%
Loss Asset Total Outstanding 100.00 %
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 Income Recognition
The policy followed by the bank on IRAC should be objective & based on
record of recovery & not subjective.
Income on NPA accounts to be recognized only when actually received & not
on accrual basis (even for Govt. guaranteed A/c’s). However, the recovery
should not be from fresh / additional facilities sanctioned.
Interest on advances against TDR, KVP / IVP, LIC policy, etc. to be
recognized on accrual basis if adequate margin is available.
Fees & commissions earned by the bank on re-scheduled loans should be
treated as income on accrual basis over the period of the loan.
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In case of NPA A/c., if the income credited on accrual basis in the past is not
realized then such income needs to be reversed.
Bank should follow an accounting policy, for appropriation of recoveries in
NPA A/c., which is uniform & consistent if there is no clear agreement between
the bank & borrower regarding the appropriation of recoveries.
 Early recognition of Financial Distress
As per RBI guidelines effective from April 1, 2014 banks have to further classify
the “Standard” accounts into four categories, with a view of early detection of
financial distress.
Central Repository of Information on Large Credits (CRILC) is formed by RBI
& banks to report the status of all accounts where the aggregate FB& NFB limits
are more than Rs 5 Cr.

SMA Subcategories Basis for classification

SMA – 0 Principal or interest payment not overdue for more
than 30 days but account showing signs of incipient
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stress (Please see Appendix to Part C)
SMA – 1 Principal or interest payment overdue between 31-60
days
SMA – 2 Principal or interest payment overdue between 61-90
days
 Early recognition of Financial Distress
Following are the signs of stress if observed in any account then to be categorised as
SMA-0.
-Delay of more than 90 days in submission of stock statements/ other financial data.
-Sales/operating profit lesser than projections by more than 40%.
-Preventing banks from conducting Stock audit/reduction in DP by more than 20%after
stock audit.
-Evidence of diversion of funds/ Drop in risk rating by 2 or more notches.
-Return of 3 or more cheques for want of funds in 30 days.
-DPG/LC/BG devolved & not adjusted within 30 days.
21
-Third request for extension of time for creation / perfection of charge of the bank on
securities.
-Increase in frequency of OD in Current A/cs
-The borrower reporting stress in the business/ financials.
-Promoters selling / pledging their shares in the borrower company due to financial stress.
 Early recognition of Financial Distress
If banks do not report the SMA status of an account as required then the
banks have to make following accelerated provisioning.
Asset Period as NPA Current provisioning Revised Accelerated
Classification (%) provisioning (%)

Sub – Standard Up to 6 Months 15 15

Secured 6 M to 1 Year 15 25
Sub – Standard Up to 6 Months 25 (NI) /20 (I) 25
Unsecured 6 M to 1 Year 25 (NI)/20 (I) 40
Doubtful I 2nd Year 25 (S)/100 (U) 40 (S)/100 (U)
22 Doubtful II 3rd & 4th Year 40 (S)/100 (U) 100 (S & U)
Doubtful III 5th Year onwards 100 (S & U) 100 (S & U)

(Note: NI=Non Infrastructure , I=Infrastructure , S= Secured , U=Unsecured)

 PROJECT LOANS

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 Project Loans
Project Loan: A Term Loan extended for the purpose of setting up of an
economic venture.

Project Loans of Two Types:- Infrastructure / Non Infrastructure

Banks should fix date of completion (DOC) and Date of Commencement of

Commercial Operations (DCCO) for all project loans at the time of sanction of
the loan / financial closure

For these loans banks are allowed to continue the status of loans as “Standard”
in the following cases subject to certain conditions
24 a) Deferment of DCCO
b) Change in ownership
c) Increase in project outlay due to increase in scope & size of the project

 The above cases would not be considered as restructuring, though the

repayment period & other loan conditions will change.
 Guidelines on Asset Classification- Project Loans
A) Deferment of DCCO
 Deferment of DCCO & consequential change in repayment terms will not be
considered as re-structuring subject to following conditions.
• For infrastructure projects the revised DCCO falls within a period of 2
years. For non infrastructure project the period is 1 years.
• No change in other terms & conditions.
 If revision in DCCO is beyond the time limits given above then following
condition to be complied.
• For infrastructure projects involving court cases further period of 2 years
is allowed (2 + 2 = Total 4 years)
• For infrastructure projects delayed for reasons beyond the control of the
25 promoters additional period of 1 years is allowed (2 + 1 = Total 3 years)
• For non-infrastructure projects delayed for reasons beyond the control of
the promoters additional period of 1 years is allowed (1 + 1 = Total 2
years)
 The above classification benefits are not available to project under
commercial real estate.
 Deferment of DCCO ……. Contd..
 To avail the benefit of standard classification, following conditions
needs to be complied.
• The application for re-structuring should be received before expiry of
the above period till the time the account has standard classification.
• In cases where moratorium for payment of interest is given, banks
should not book interest income on accrual basis beyond the initial
period.
• Provision on the standard assets to be higher than the others.
 Multiple revision of DCCO within the above stipulated period would
26 be considered as single event of re-structuring, provided the total
deferment of DCCO does not exceed the limits above & the other
terms & conditions are same.
 Banks may fixed the DCCO outside the limits given above, but the
“standard” status of the account will not continue.
 Guidelines on Asset Classification- Project Loans
B) Change in ownership
 To facilitate revival of the projects stalled due to in adequacies of the
current promoters & change in ownership takes place by the time upto
original DCCO or the extended time, a further period of two years for
deferment of the DCCO is allowed.
 The following conditions needs to be complied.
• Banks to established that the project is stalled due to current
promoters & there is a high probability of CCO if there is change in
ownership.
• The new promoter should have sufficient experience in the project /
27 activity involved.
• The new promoters should hold at least 51% of the paid up capital of
the new project.
• Viability of the project should be established to the satisfaction of the
banks.
 Change in Ownership…….Contd…
• The banks should clearly establish that the acquirer does not belong to the
existing promoter group
• Asset classification of the account as on the ‘reference date’ would continue
during the extended period.
• Reference date means the date of execution of preliminary binding
agreement between the parties to the transaction, provided that the
acquisition/takeover of ownership as per the provisions of law/regulations
governing such acquisition/takeover is completed within a period of 90 days
from the date of execution of preliminary binding agreement.
• The new promoters should bring substantial money to show their
28 commitment to complete the project in time & funding the costs overruns.
• While extending the DCCO banks to take care that the repayment of the
loan is covered within 85% of the economic life of the project.
• This facility is available only once & not for subsequent change in ownership.
 Guidelines on Asset Classification- Project Loans
C) Increase in project outlay due to increase in scope & size of the project
 The following conditions needs to be complied.
• The increase in scope and size of the project takes place before
commencement of commercial operations of the existing project
• The rise in cost excluding any cost-overrun in respect of the original
project is 25% or more of the original outlay
• The bank re-assesses the viability of the project before approving the
enhancement of scope and fixing a fresh DCCO.
• On re-rating, (if already rated) the new rating is not below the
29 previous rating by more than one notch
 Project Loans….Contd.
Classify as NPA during any time before commencement of
commercial operations as per record of recovery (90 days overdue),
unless restructured and eligible to be classified as standard.
(4.2.15.2 & 4.2.15.3)

Income Recognition
On accrual basis for standard accounts & cash basis for NPA
30
In case of FITL a provision for an equal amount treated as
income needs to be made in an account “Sundry Liabilities A/c
(Interest capitalization)”
 Project Loan- Other Issues
Mere extension of DCCO within permitted time limits & consequential
shift in repayment period by equal or shorter duration would not mean
restructure, provided all other terms & conditions remain unchanged.

CRE projects merely extension of DCCO would not be considered as

restructuring, if the revised DCCO falls within a period of 1 year from
original DCCO & there is no change in other terms & conditions except
possible shift of repayment schedule and servicing of loan. Such CRE
31 projects will be treated as Standard.
 Case Study

32
 Case Study
A term loan is granted & EMIs are payable at the start of every month on
1st day of the month. What will be the date of becoming NPA (sub-
standard) in the following cases.
Term loan amount Rs 90 lacs & EMI due on 1st Oct,2016 is not
received till 31.3.17.
Term loan amount Rs 90 lacs & EMI due on 1st Nov,2016 is not
received till 31.3.17.
Term loan amount Rs 110 lacs & EMI due on 1st Nov,2016 is not
33 received till 31.3.17.
 Case Study
Housing loan of Rs 47.85 lacs was disbursed on 1/5/2012 for ready
possession flat & repayment was to commence after moratorium of 6 months
i.e. 1st Nov, 2012 & repayable by way of 180 EMIs (principal + Int) of Rs
50000 per month.
Following is the position of yearly EMIs due & EMIs received as on 31.3.17
Financial Year Amount received towards EMI’s (Rs)
2012-13 225000
2013-14 540000
2014-15 505000
2015-16 540000
34
2016-17 525000
Total 2335000

Whether the account should be classified as NPA as on 31.3.17 ?

 Case Study
A borrower has been sanctioned following limits :-
a) Term Loan Rs 1000 lacs
b) Working capital (CC) Rs 500 Lacs
c) Bill discounting under LC Rs 200 lacs

What will be the classification of all the above a/cs in the following cases
(assuming other accounts are being operated as per guidelines) :-
35 1) Term loan has been classified as sub-standard due to non-payment of
dues as on 31.3.17.
2) Bill discounting under LC has been classified as NPA as on 31.3.17
 Case Study

CC limitof Rs 200 lacs was sanctioned & disbursed on 10/4/16. What

will be the classification as on 31.3.17 in each of the following cases
where stock statements are not received regularly?

a) Last stock statement on record is of Aug-16

b) Last stock statement on record is of Nov-16
36
 Case Study
Car loan of Rs 20 lacs was sanctioned & disbursed on 1.5.15. However
during the current year, the hypothecated car met with an accident &
salvage value is estimated to be around 5 % of loan outstanding. Further,
insurance claim is expected to be rejected as insurance premium was not
paid & policy stood expired on date of accident. Further as on 31.3.17, 5
EMIs were due.
What will be the classification of such account.

37
 Restructuring of Advances

38
 Restructuring of Advances
Four Broad Catagories:
Advances extended to Industrial Units(IU)
Advances extended to IU under CDR
Advances to SME
All other advances
Exception: Advances restructured due to natural calamities relating
to Agriculture
39
Eligibility
Any account classified under standard, sub standard and doubtful
categories.
 Restructuring of Advances………. Contd..
Restructuring cannot be done retrospectively.

While the restructuring proposal is under consideration, usual asset classification

norms would continue to apply.

Asset Classification status on date of approval of restructuring relevant to decide

the asset classification status after such restructuring

Restructuring should be subject to customer Application / consent for terms and

conditions.

40 Financial viability should be established and there is reasonable certainty of

repayment.

Borrowers indulging in frauds & malfeasance are ineligible.

BIFR cases are not eligible without their express approval.

 Restructuring of Advances………. Contd..
 Standard Asset would get reclassified as sub standard immediately
 Account which is already NPA would continue to have the same
classification & may slip further based on pre-restructuring repayment
schedule.
 Additional finance would be treated as standard up to a period of one
year. After that the classification of other accounts of the borrower will
apply.
 All restructured accounts, classified as NPA upon restructuring would
41 be eligible for upgradation after observation of satisfactory
performance during the specified period. (during 1year it should not be
out of order for more than 90 days and no overdue at the end)
 Restructuring of Advances- Provisioning Norms
 Provision on restructured advance as per extant provisioning norms.
 Standard restructured advances will attract higher provision for first 2 years.
In case of moratorium, this period will also be covered for treating as
standard.
 NPA restructured advances when upgraded to standard attract higher
provision in first year.
 Diminution in fair value is an economic loss to bank & needs additional
provision on each BS date.
42  For advances below Rs.1 crore, 5% of total exposure can be provided
notionally for such diminution in fair value of advance.
 Provision for diminution in fair value is in addition to the normal provisions
required.
 Both the above provision will not exceed 100% of the outstanding amount.
 Restructuring of Advances- Provisioning Norms
Special Regulatory Treatment for asset classification.
Not available to Consumer & Personal Advances, Advances classified as
Capital Market Exposure, Advances classified as Commercial Real Estate
Exposure.
The special regulatory treatment for asset classification is available subject to
compliance of the following conditions.
 Dues of the bank are fully secured by tangible security (except SSI
borrower with outstanding upto Rs.25 lacs & infrastructure projects)
 Unit becomes viable in 8 years, if it is engaged in infrastructure activities
and in 5 years in case of other units.
 Repayment period including moratorium does not exceed 15 years for
43 infrastructure & 10 years for other projects (10 years ceiling won’t apply to
restructured Home Loans).
 Promoters' sacrifice and additional funds brought by them should be a
minimum of 20 per cent of banks’ sacrifice or 2 per cent of the
restructured debt, whichever is higher
 The restructuring under consideration is not a 'repeated restructuring‘.
 Restructuring of Advances- Provisioning Norms
W.e.f. April 1, 2015, a standard account on restructuring (for
reasons other than change in DCCO) would be immediately
classified as sub-standard on restructuring as also the non-
performing assets, upon restructuring, would continue to have the
same asset classification as prior to restructuring and slip into
further lower asset classification categories as per the extant asset
classification norms with reference to the pre-restructuring
repayment schedule.
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 Income Recognition on Restructured Advances
 For restructured accounts classified as “standard” income to be booked
on accrual basis.
 For restructured accounts classified as NPA income to be booked on
cash basis.
 If other facilities are treated as NPA, the income on the additional
finance should be recognised only on “cash basis” though it may be
classified as “standard” for one year.
 The unrealised income represented by FITL / Debt or equity
45 instrument should have a provision in an account styled as "Sundry
Liabilities Account (Interest Capitalization)".
 Only on repayment in FITL, P&L A/c. to be credited & Sundry
Liabilities A/c. to be reduced.
 Questions ? ? ?

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