Question
If an asset has been considered "doubtful" for "One to
three years," what is the provision required for the secured portion?Solution
For the secured portion of a doubtful asset, the provision is 30% if it has been doubtful for one to three years. Doubtful Assets: (i) 100 per cent provision to the extent to which the advance is not covered by the realisable value of the security to which the NBFC-BL has a valid recourse shall be made. The realisable value is to be estimated on a realistic basis; (ii) In addition to (i) above, depending upon the period for which the asset has remained doubtful, provision to the extent of 20 per cent to 50 per cent of the secured portion (i.e. estimated realisable value of the outstanding) shall be made on the following basis:
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