Category: Economic

RSS worker murder: Kerala CM Pinarayi Vijayan meets BJP, RSS leaders over growing cases of violence in state

Head of Government of Kerala, Pinarayi Vijayan today convened a meeting with BJP-RSS leaders in the State in the context of recent political violence and the murder of an RSS worker here.

BJP Vital president, kummanam rajasekharan, former union minister and MLA, O Rajagopal and RSS leader, G Gopalankuttyare, attended the meeting with the head of government. The Secretary of State of the PCI (M) Kodiyeri Balakrishnan also at the meeting.

When the Prime Minister came to the appointment, a group of members who were present TV to take video footage before the start of the meeting was questioned by Vijayan to leave.

On Tuesday, the governor of Kerala, P Sathasivam, had convened the Prime Minister and DGP Loknath Behara about the incident. The Minister assured that he would meet with the leaders of the BJP state and RSS.

Vijayan and the DGP met with the governor separately after being summoned by Raj Bhavan to determine the following measures recent violent incidents, including the murder of 34-year-old Rajesh on July 29.

The state had witnessed a series of violent incidents involving workers BJP-RSS and CPI-M, with the capital district, killed by the bombing of incidents against rival houses of revelers in recent days.

The BJP state office was destroyed on July 28, when stones were thrown at the home of Kodiyeri Balakrishnan’s son, Bineesh Kodiyeri, Minister of State (M).

Rajesh was murdered by a machete-driven story-rolling band here on Saturday. His left arm was severed and there were several injuries along his body. The BJP had requested hath sunrise until dusk last year in protest of the incident.

Police said seven people, including the first accused Manikandan, historian, were arrested in the killing of RSS workers. It was said that the attack was due to personal enmity between Manikandan and the victim during the last half year.

Yesterday, Union Minister Rajnath Singh spoke with the Chief Minister and expressed concern about the attacks on political workers in Kerala and said that political violence was unacceptable in a democracy.

While state President BJP, kummanam rajasekharan, claimed that the PCI (M) was behind the attack, district chief PCI (M) denied the party’s role in the attack.

The Secretary of State of the PCI (M) Kodiyeri Balakrishnan said that the murder of RSS worker was a fallout from personal rivalry and his party had nothing to do with it.

However, Rajasekharan claimed that the CPI-M was trying to eliminate its political opponents and urged them to refrain from violence. The opposition Congress noted a swift Kozhikode yesterday to protest against the politics of violence.

BSP leader shot dead outside Allahabad University; supporters torch bus, attack hospital

A leader of the Bahujan Samaj Party (BSP) was shot dead at a shelter near Allahabad University in Allahabad in Uttar Pradesh Monday night, police said Tuesday.

Energetic BSP activists staged a violent protest and set fire to a bus that demanded the authors’ premature arrest. Strong police forces were rushed near Indian Press Crossing to control the situation.

Preliminary investigations revealed that Rajesh Yadav had gone to meet someone at the Tara Chand Hostel with his friend, Dr. Mukul Singh, where he had an altercation with some people.

Dr. Singh told police that some people attacked the BSP chief and shot him around 2:30.

Yadav suffered a gunshot wound in the stomach and was transported to a private hospital by Dr. Singh where he died during his treatment.

Allahabad police chief Siddarth Shankar Meena said the empty cartridges were found in the Yadav vehicle.
According to media reports, on Tuesday two buses were set on fire and a hospital was reportedly attacked by BSP workers.

Police investigate the incident and an FIR will be filed after receiving a complaint, authorities said.

Originally from the village of Bhadohi in Duguna, Yadav challenged the assembly elections of Uttar Pradesh in 2017 on a BSP ticket.

Reports indicated that Yadav lived with his family in Haritkunj apartment near Chandrashekhar Azad Park.

Resolve to force poverty, communalism to quit India: PM Narendra Modi

Prime Minister Narendra Modi on Sunday called for the launch of a mega campaign “Sankalp Siddhi is” to celebrate the 70th anniversary of India’s freedom, in order to free the country from corruption, communality, caste , Terrorism, dirt and poverty.

Giving one more indication that he has set his sights beyond 2019, Modi said that like the five years between 1942, when the standing movement of India began, and 1947, when India gained freedom, it became The decisive period in the history of the nation, has seen a new five-year period, 2017-2022, so crucial to solve the most important problems of India.

Speaking in his monthly radio address, Mann Ki Baat, the prime minister also expressed satisfaction with the progress of the tax system on the goods and services tax (GST), one month after its entry into force. The GST, Modi said, is not just a tax reform, but a new campaign of economic and social reform.

The MP mentioned the recent floods in Assam, Gujarat, Rajasthan and West Bengal, and said that significant relief was given to flood-affected states and crop insurance companies were invited to be proactive in paying the The farmers concerned.

“We must celebrate August 15, 2017 as a result of Sankalp Parva or resolution of the day, and in 2022 on the occasion of 75 years of freedom, we have to make our year 2017. In this August resolution, it must unite and resolve. : Dirt, Quit India, Poverty, Quit India, Corruption, Quit India;

Terrorism, India stopped; Castes, Quit India; Communism, Quit India! The launch of a mega Sankalp campaign is Siddhi – Achievement Through Resolve -. On August 9 for a new India, “said the prime minister urged citizens to use all kinds of forums to carry out this task, including the online platforms.

The PM also sought the ideas of the people to integrate into his speech on Independence Day. He said he had heard “complaints” in which his earlier Independence speeches were too long and he was going to try to keep the next direction.

Indian festivals are instruments of social improvement, which have a direct relationship with the economic conditions of the poor, said the prime minister, and urged people to use objects made by the poor during the holidays ahead of Raksha Bandhan, Janamashtami , Ganesh Chaturthi and Independence Day.

As for the GST, the prime minister said that only a month later, his “benefits can already be observed.” He said he felt very happy and satisfied when a bad writing to say how, because of the GST, the prices of several staples were reduced.

“Customer confidence in traders increases – in fact, there has been a positive effect on our economy in a very short time.The speed at which a seamless transition took place, and rapid migration and new registrations, Has provoked a new sense of confidence in the country, “he said.

In the devastating flood scenario in some states, he said he was fully overseen and that various agencies such as the Army, FAI, National Response to Disaster Force (NDRF) and paramilitary forces are involved in rescue and rescue operations.

Presidential Election 2017: Nomination Process Begins - 10 Points

Presidential Election 2017: Nomination Process Begins – 10 Points

Presidential Election 2017: Nomination Process Begins – 10 Points

All India | Edited by Shylaja Varma | Updated: 14 June 2017 16:08 IST
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13 incredible women of the world’s richest men (Hooch)

Presidential Election 2017: the nomination process begins – 10 pointsLes elections fourteenth president of India will be held on July 17.

NEW DELHI: The Electoral Commission of India has opened the procedure for the submission of the application for the fourteenth president of India today. The nomination process will end in two weeks, June 28 President Pranab Mukherjee, who ended in July, the Center and opposition parties led by Congress have stepped up efforts to find a suitable candidate.

Opposition parties are meeting in the capital today to establish their joint strategy and propose a candidate unanimously. BJP leader Amit Shah formed a group of three Cabinet ministers on Monday to find common ground with NDA allies in the election of a candidate.

Here are the 10 best moments during the presidential elections of 2017:
An election will be held if the government and the opposition did not reach a consensus and decided to enter independent candidates.

House and Rajya Sabha lawmakers and state legislators who make up the electoral college vote in the July 17 elections. The strength of the polling station is 10,98,903.

Applicants or their representatives may submit nomination papers with Rs. 15, no later than June 28th The documents will be reviewed on June 29 Only candidates one candidate backed by 50 voters and supported by another 50 can submit an application.

Candidates may withdraw their application by July 1.
The vote will take place on July 17 from 10:00 a.m. to 5:00 p.m. At polling places determined by rules. The results will be reached on July 20.

Ministers Rajnath Singh, Arun Jaitley and M Venkaiah Naidu are part of the panel formed by Amit Shah who consult with their allies.
The sources said a candidate from the National Democratic Alliance (ADN) must send his application by June 23

Last month, Congressional President Sonia Gandhi hosted a luncheon for leaders of the 17 opposition parties in order to find a joint opposition candidate for the president.
The TMC chief and West Bengal’s chief minister, Mamata Baneree, suggested that the Center and the opposition supported a candidate by consensus.

Some likely candidates for opposition leader Janata Dal (States) Sharad Yadav, former governor of Bengal Gopalkrishna Gandhi and former president of Lok Sabha Meira Kumar.

Market Live: Sensex jumps 250 pts; pharma & IT stocks rally, Divis Labs zooms

Market Live: Sensex jumps 250 pts; pharma & IT stocks rally, Divis Labs zooms

Market Live: Sensex jumps 250 pts; pharma & IT stocks rally, Divis Labs zooms

Moneycontrol News

12 h 17 h update of stock market benchmarks hold gains in the morning, Sensex increasing by 252.92 points or 0.81% and 31 613.55.

Approximately 1,479 advanced populations versus 885 participations decreased BSE.

Meanwhile, the pre-opening session in the NSE resumed, with the skillful increased 47.50 points or 0.49% to 9,713.30.
11:59 am Normal trade: The National Stock Exchange said it would start its normal trade at 12.30.

Operation of the pre-opening session will be held for seven hours from 12 a.m. to 3 p.m.-10 p.m., he added.

11:57 buzz: Divis Labs has risen more than 15 percent from the day as the US Food and Drug Administration will lift import alert 99-32 at the company’s II Unit in Visakhapatnam.

The FDA issued a warning to imports, at points 99-32 and 66-40 of March 2017 and in a warning letter in May 2017 for the installation of Visakhapatnam.

Divi Laboratories has submitted detailed responses and provided updates on Form 483 and timely warning letter.

11:45 The head of the Ministry of Finance said that the government is aware of the technical problem and informed interruption NSE PADOTZKE of NSE exchanges because of software problems.

11:43. Taking expert in the NSE technician: “It is unfortunate to see this show in a day in the market reaches new heights The key element is timely communication and timely action, what is missing in this case,” said CNBC-TV18 Sanjay Dutt Of Quantum Values.

We need more transparency and the exchange of communication, he added.

11:40 The show opens Gold Bond: The Sovereign Gold Bond 2017-18 – Series II chart opened today. The cut in this type of issue has been set at Rs 2780 per gram of gold.

“The nominal value of the bond based on the simple closing price (published by India and the Association of bullion jewelers) for the 999-purity gold of the week before the subscription period, ie 07/03/01 of 2017 rose At 2830 Rs per Government of India in consultation with the Reserve Bank of India, has decided to propose a reduction of Rs 50 per gram at the nominal value of Sovereign Gold Bond “the RBI said that the pricing of the issue .

The question of the obligation will be closed on 14 July. The Government of India can, with notice, terminate the plan before the stipulated period, said the RBI.

The bonds, to be issued on July 28, will be sold through banks, shares of the holding company of India (SHCIL), designated post offices and recognized exchanges, namely the National Stock Exchange of India Limited And the Mumbai Stock Exchange.

11:34 “Do not go through the ‘clean’ message, we are still working on the problem,” said NSE.

11:30 AM NSE is closed for today’s session.

11:29. The GMR Infrastructure said Goa’s international airport has reached its fund-raiser for the proposed Mopa airport.

The bank will provide a loan of Rs 1,330 crore for the development of the Mopa airport project.

11:18 The cash market and NSE futures and options are not open to trading, although the change has already announced that it would open at 11:15.

11:17 Market Update: BSE Sensex 30 shares rose 205.14 points or 0.65% and 31 565.77.

Approximately 1,513 advanced stocks versus 720 stocks decreased in BSE.

facbook twitter googlepluse LoC firing and Doklam: Chinese strategic expert says India unwise to engage in two conflicts

facbook twitter googlepluse LoC firing and Doklam: Chinese strategic expert says India unwise to engage in two conflicts

LoC firing and Doklam: Chinese strategic expert says India unwise to engage in two conflicts

In the continuous trigger on Doklam and Control Line drawn between India and Pakistan, a Chinese strategic expert said that India is now taken care of “two wars” simultaneously and questioned the ability of Delhi to manage both.

1 Chinese strategic expert: prudent for India to participate in three conflicts simultaneously.
2Y said that China has nothing to do with the situation in Kashmir.
India is involved in Pakistan in a shootout on the Kashmir border.
With renewed firing along the Line of Control (LOC) between India and Pakistan, a Chinese strategic expert said Monday that it would be “prudent for India to engage in two conflicts at the same time.”

As for the continuous disruption and shoot Doklam Control Line, Minwang Lin, a strategic expert of the Institute of International Studies of Fudan University, said Global Time Festival, a tabloid known for its hard-line views, that the India now faces “two wars” simultaneously and questioned Delhi’s ability to manage so much.

“China has nothing to do with the situation in Kashmir but it would not be prudent for India to engage in two conflicts at the same time,” Lin said in the newspaper.

A separate commentary Sunday in the same article also linked the Kashmir issue to India’s intervention in the Doklam conflict between China and Bhutan, saying it could set a precedent for “the third-country army” to intervene in Jammu and Kashmir .

“While India has been invited to defend the territory of Bhutan, it could be limited to its established territory and not to the disputed area. Otherwise, according to the logic of India, if the Pakistani government demand , The army of a third country may enter the disputed area between India and Pakistan, including India-controlled Kashmir, “said long-standing strategic expert Xingchun, using the term with which China refers to JK.

Fire exchange in Kashmir FRONTICE
On Monday, Lin said: “There are frequent conflicts and military struggles between Kashmir areas controlled by both sides.” The newspaper said that “off the border dispute with China, India is involved in Pakistan in a cross-border Kashmir shooting.”

It was the second reference to Kashmir in a day at the Global Times, a tabloid led by the party that carried the Chinese saber on the Doklam trigger.

Sunday Xingchun Long, director of the Center for Indian Studies in West China Normal University, said in a commentary that “Indian troops invaded the Doklam region in the name of helping Bhutan, but in fact, the invasion was Thought to help India for the use of Bhutan. ”

He said that “according to the logic of India, if the request of the government of Pakistan, the army of a third country can enter the disputed area between India and Pakistan, including Kashmir controlled by India,” referring to Jammu and Kashmir.

Larga wrote that “this incursion reflects that India fears that China could rapidly continental separated from India northeastern India by military means, which are divided into two parts of India.”

“North Indians are not closely identified with India, and several armed organizations are fighting for independence from the northeastern states of India,” he said.

“India has interpreted the construction of China’s infrastructure in Tibet as having geopolitical intent against India. India itself is not able to do the same for the Northeast, so it tries to stop road construction in China.”

Bank Audit Sundries and Suspense Accounts

  • In case of stationery and stamps the auditor should check the control on custody and issue of stationery items, stamps The auditor should review the process and registers for the same. Stationery items will also include Term deposit receipts drafts, pay orders, cheque books, traveler cheques, Gift Cheques etc.
  • The auditor should offer the suggestions for better control in maintenance and use of stationery.
  • The instances of lost or missing stationery should also be mentioned in the report.
  • In case of Sundries and Suspense Accounts, the auditor should obtain the details of agewise analysis of pending entries in the account, inquire about reason for entry being pending for unreasonable period and assess the position of recoverability of the amount. The auditor should exercise his judgment about making necessary provision against such amounts.
  • In case any unusual items are notices while perusing the account, the auditor should report the same.
  • The auditor should not restrict his checking only to the pending entries, but he should also look into the entries which are squared off during the audit period.

Liabilities – Deposits

  • A deposit accepted from the public is a liability for the bank. Inoperative deposit accounts could be viewed as one of the fraud prone areas. Therefore, there are certain guidelines for operations in inoperative accounts. The auditor should see whether operations in inoperative accounts are carried out as per the guidelines issued. In case the guidelines are not followed, the details of deposits should be given name of the party, the amount due, the due date, the nature of the deposits etc.
  • The auditor should also review the deposit accounts both operative and inoperative to find out whether there are any unusual large movements (whether increase or decrease) in the aggregate deposits held at the year end. In such situation, the explanation from the branch management should be obtained. The movements without proper explanation should be reported in LFAR.
  • The auditor should obtain a list of overdue/ matured deposits at the end of the year. The amount of overdue/matured deposits should be mentioned in LFAR.

Other Liabilities – Bills payable, Sundry Deposits etc.

  • The auditors should obtain age wise details of pending entries in bills payable, sundry Deposits Accounts from the branch management.
  • The details obtained should be scrutinised to find out whether there exists any unusual items or material withdrawal/debits; The auditor should take appropriate view on such items.

Contingent Liabilities

  • The auditor should see that there exists a system which gives a reasonable assurance that all contingent liabilities are identified and properly disclosed.
  • The auditor should mention the list of major items of contingent liabilities (Other than constituent’s liabilities such as guarantees, Letters of Credit, acceptances, endorsements, ) not acknowledged by the branch.
  • The auditor should also obtain representation from branch management that all contingent liabilities have been disclosed and that the disclosed contingent liabilities do not include any contingencies which are likely to result in a loss and which therefore, require consequent adjustments of assets and liabilities.

Profit and Loss Account

  • The auditor should review the system at the branch to compute the discrepancy in interest, discounts or commission and for timely adjustment thereof. The Auditor should see the guidelines of controlling office in this regard.
  • The interest and commission should be checked on test check basis to find out whether there exists proper system to compute them correctly.
  • The income recognition Norms issued by the RBI should be followed at the branch. The auditor should report any deviation in that regard.
  • The report should also mention whether there is a system to estimate and provide interest accrued on the overdue/matured deposits.
  • The auditor should carry out the analytical procedure to find out whether there are any divergent trends in major items of income or expenditure. A suitable explanation should be asked for any divergent trend from the branch management. In case the auditor is not satisfied with the explanation he should mention the same in his report with proper details for the said divergent trend.


Books and Records

  • In most of the situations, nowadays, the books are maintained in the computerised environment.
  • If the books are maintained manually, the auditor should peruse them to find out whether they are maintained properly. The balancing is done and it is properly inked out. The books are to be authenticated by proper signatory at the branch.
  • In respect of computerised environment, the hard copies of certain accounts should be printed regularly.
  • The auditor should also mention the extent of computerisation and adequacy of the access and data security measures and other internal controls.
  • The auditor may review the process of creation of new logins, change of password the administrative control to access different files or reports through computerised system. There should be maker checker system.
  • Updating of the master data should be under supervisory control. The modification in the master data should be registered to Branch Manager only.
  • The auditor should also review the contingency
    and disaster recovery plan for the computer system. Timely backups, offsite backups, should be reviewed to understand the backup procedure.
  • The auditor should also mention any suggestion for efficient operation of the computer system.

Reconciliation of control and subsidiary Records

  • The auditor should see whether the subsidiary records are tallied with the control accounts. In case there are differences the same should be reported. He should also mention the date upto which the control and subsidiary records are balanced.

Inter branch Accounts

  • Normally, the inter branch transactions are passed through Head office account. The balance in Head Office Accounts as shown in the statement should be in agreement with the Head office Account in General Ledger. In case of any difference, the reconciliation statement should be obtained. The pending entries should be scrutinised to report whether there is a system of responding the entry promptly.
  • The outstanding debit entries in the Head office




rHAL Expression of Interest for Appointment of Internal Auditors For the period 01st April 2015 to 31st March 2017 for HAL Bangalore complex,

Helicopter Complex and Design Complex, Bangalore

Hindustan Aeronautics Limited (HAL) is a Public Sector Undertaking under the Administrative control of the Ministry of Defence. Bangalore Complex, Helicopter Complex and Design Complex are three of the five Complexes under HAL. These Complexes are engaged in the Design, Manufacture, Repair, Overhaul of Aircraft/Helicopters/Engines and Aircraft accessories. These Complexes have an annual turnover in excess of Rs. 6000 Crores for the year 2013-14.

These Complexes are in the process of appointing CA firms for carrying out the Internal Audit function for each Division / Office separately for the period from 1st April’ 2015 to 31st March’2017). Keeping with the requirements of transparency and equality of opportunity, the HAL Bangalore Complex is seeking to make these appointments on the basis of tenders benchmarked against a minimum viable offer. Interested CA firms may please visit the HAL website at under tenders of Aircraft Division for more details and information on how to apply.

For Hindustan Aeronautics Ltd H.K.Prakash

DGM(P&S)-Aircraft, Bangalore

Long Form Audit Report

The statutory Auditor of the Bank is required to submit Audit Report as per the requirements of the Banking Regulation Act, 1949. It is called as Statutory Audit Report. This audit report broadly gives a true and fair view on the financial statements. However, this report does not necessarily communicate the lacunae in the operations and internal control system at the bank. Hence, the RBI advised the Public Sector Banks to obtain the Long Form Audit Report (LFAR) from the auditor since 1985. LFAR is a separate report to be submitted to the Management in the format prescribed by the RBI. The format of LFAR was initially prescribed in 1985, was revised in 1992 and subsequently in the year 2003. The present format is effective from 31st March, 2003.

Over the period, there have been many changes in the operations in the Banking industry, viz. CBS environment, internet banking, SMS alerts, spread of ATM centres, etc. Considering the changes in the operations in the Banking industry, the format of LFAR is under review. However, till the new format is notified, the existing format is in use. Therefore, the statutory auditor is expected to report in the existing format given by RBI.

Statutory Auditor is expected to review the LFARs submitted by the branch auditors and draft his LFAR in the format prescribed for the bank as a whole. Therefore, it is necessary tor the branch auditors to draft the LFAR carefully and with clarity so that a relevant point if any, at the branch is not missed by the Central Statutory Auditor, while forming its opinion or giving his observations about the internal control and operations.

The format of LFAR is in a questionnaire form. These questions are to be answered clearly. These questions are only indicative and not exhaustive. Therefore, the auditor should not limit the report to only answering the questions. But, he may mention any relevant point which the auditor feels necessary

Bank Audit

to mention, in the same in the LFAR. The auditor should be clear, precise and relevant while finalising the LFAR of the branch.

While drafting the LFAR the following aspects need to be considered.

  • The LFAR is not a substitute for Statutory Audit Report. Nor is it deemed to be a part of Statutory Audit Report.
  • The Statutory Audit Report is a self contained document and the auditor should not make any cross reference to the observation in the LFAR. In case of any matter of emphasis, the auditor should mention the same in the report clearly.
  • The matters in the main report may be elaborated in the LFAR.
  • Any adverse comment made by the auditor in the LFAR, the auditor should consider whether qualification in the main report is required.
  • It is not necessary that every adverse comment in the LFAR will result into a qualification in the main report. Therefore, the auditor should use his judgment in the facts and circumstances in each case. However, every qualification in the auditors report should be elaborated in the LFAR.
  • The details given in the LFAR should be clear on facts and the opinion of the auditor is also to be mentioned so that the SCA can take up the point appropriately
  • Though the format of LFAR is in a questionnaire form, the auditor should not necessarily limit the answer to YES or NO. He should mention his opinion, if any, over there as well.
  1. Broad Structure of LFAR

In this article, the discussion is mainly on the LFAR applicable to the branch audit. Hence, the prescribed format of bank branch LFAR is discussed here.

The format of the LFAR consists of the questions on four major areas. Such as:

  1. Assets
  2. Cash
  3. Balances with RBI, SBI and other Banks.
  4. Money at call and Short Notice
  5. Investments
  6. Advances
  7. Other Assets
  8. Liabilities
  9. Deposits
  10. Other Liabilities
  11. Contingent Liabilities
  12. Profit and Loss Account
  13. General
  14. Books and Records
  15. Reconciliation of Control and Subsidiary records
  16. Inter branch Accounts
  17. Audits/Inspections
  18. Frauds
  19. Miscellaneous

In addition to these questions, are also given questionnaires applicable to specialised branches

  • Dealing in Foreign Exchange Transactions
  • Dealing in very large advances in excess of ^ 100 crore.
  • Dealing in NPAs such as Asset Recovery Management Branches.
  • Dealing in clearing house operations, normally referred to as service Branches.

In addition to these questionnaires, there is a format for Annexure for Large/Irregular/Critical Advances. Normally, this annexure is to be filled up by the branch management and the auditor should verify the details mentioned in the Annexure. The details will be pertaining to the advance granted in excess of ^100 crore.

Some of the matters mentioned in the LFAR needs compilation of information at the branch. It is the responsibility of the concerned branch to compile the information and hand it over to the auditor for verification. The auditor should verify the correctness of information and include the same in his LFAR. In case, auditor faces any problem in getting such information or has a doubt about the correctness of information, he should report the same in his LFAR.

  1. Reporting Under Specific Clauses

The following are the broad guidelines for verification

and reporting under specific clauses


  • The branch is expected to maintain the cash balance within the limit prescribed by the controlling authority. This is called the retention limit for the cash. In case the branch holds cash in excess of the retention limit, the auditor should report the same.
  • The auditor should count the cash including the cash in ATM and see whether it tallies with the books.

The excess balance should also be reported to the controlling authority within the prescribed time

Bank Audit Loss assets should be written off

If loss assets are permitted to remain in the books for any reason, 100% of the outstanding should be provided for.

brought by them should be a minimum of 20% of banks’ sacrifice or 2% of restructured debt whichever is higher. The term bank’s sacrifice’ means the amount of “erosion in the fair value of the advance”. The additional funds required to be brought in by the promoter should be brought up front and not be phased over a period of time.

  1. Promoter’s contribution need not necessarily be brought in cash and can be brought in the form of de-rating of equity, conversion of unsecured loan brought by the promoter into equity and interest free loans.
  2. The restructuring under consideration is not a ‘repeated restructuring’
  • Promoter’s personal guarantee should be obtained in all cases of restructuring. Corporate guarantee cannot be accepted as a substitute for personal guarantee. However, the same can be accepted in cases where promoters of a company are not individuals.
  1. Provisioning Norms
  • Substandard assets

A general provision of 15% on total outstanding should be made without making any allowance for ECGC guarantee cover and securities available.

The ‘unsecured exposures’ which are identified as ‘substandard’ would attract additional provision of 10%, i.e., a total of 25% on the outstanding balance! However, in view of certain safeguards such as escrow accounts available in respect of infrastructure lending, infrastructure loan accounts which are classified as sub-standard will attract a provisioning of 20% instead of the aforesaid prescription of 25%.

  • Doubtful assets
  1. a) 100% of the extent to which the advance is not covered by the realisable value of the security to which the bank has a valid

recourse and the realisable value is estimated on a realistic basis (unsecured portion), b) In regard to the secured portion, provision may be made on the following basis, at the rates ranging from 25% to 100% of the secured portion depending upon the period for which the asset has remained doubtful:

Period for which the advance has remained in ‘doubtful’ category Provision requirement (%)
Up to 1 year 25
1 to 3 years 40
More than 3 years 100



  • Loss assets

Loss assets should be written off. If loss assets are permitted to remain in the books for any reason, 100 percent of the outstanding should be provided for.

  • Standard assets
  1. Direct advances to agricultural and SME sectors at 0.25%;
  2. Advances to Commercial Real Estate (CRE) Sector at 1%;
  3. Advance to commercial Real Estate – Residential Housing Sector at 0.75%
  4. Housing loan at teaser rates 2% and 0.40% after 1 year from the date on which the rates are reset at higher rates
  5. All other loans and advances not included in (a), (b), (c) and (d) above at 0.40%
  6. Restructured account classified as standard would attract higher provision. Para of Master Circular may be referred for the same.
  • Valuation of security for provisioning


  1. There are specific guidelines in para 5.4(iii) of the Master Circular for consideration of security in respect of infrastructure projects. The same may be referred.

In cases of NPAs with balance of ^ 5 crore and above stock audit at annual intervals by external agencies appointed as per the guidelines approved by the board of the bank would be mandatory. Collaterals such as immovable properties charged in favour of the bank should be got valued once in three years by valuers appointed as per the guidelines approved by the Board of Directors.