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NPA Tracking in CBS

NPA Tracking in CBS. AREAS FOR DISCUSSION. Asset Classification Risk Grades Arrear Conditions Asset Tracking & Stamping Theo Balance Auto upgradation Income Recognition. AREAS FOR DISCUSSION. Recovery appropriation Provisioning Norms NPA Enquiry Functions NPA Norms for AGRI ACCOUNTS

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NPA Tracking in CBS

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  1. NPA Tracking in CBS

  2. AREAS FOR DISCUSSION • Asset Classification • Risk Grades • Arrear Conditions • Asset Tracking & Stamping • Theo Balance • Auto upgradation • Income Recognition

  3. AREAS FOR DISCUSSION • Recovery appropriation • Provisioning Norms • NPA Enquiry Functions • NPA Norms for AGRI ACCOUNTS • Granting NPA Holiday • Amendments in Theo balance • Regeneration of Repayment Schedule on Theo bal • Asset Monitoring Reports

  4. CONDITIONS AFFECTING ASSET QUALITY Cash Credits / Over Drafts • Out of order –OS>DP • Interest not serviced • Stock Statement not submitted • Account not renewed • Erosion in security >90% Term Loans / Demand Loans • EMI/Principal and/or Interest not paid • Erosion in security >90%

  5. ASSET CLASSIFICATION • RBIs Policy and Guidelines on IRAC Norms • Standard Assets • Sub Standard Assets • Doubtful Assets ( D1, D2, & D3) • Loss Assets

  6. RISK GRADES(IRAC STATUS)IN CBS • 00 -STANDARD ASSET • 01 -STANDARD BUT TEMPORARILY IRREGULAR 7 – 29 DAYS • 02 -STANDARD BUT IRREGULAR FOR 30 DAYS BUT< 60 DAYS [SMA –I] • 03 -STANDARD BUT IRREGULAR FOR 60 DAYS BUT< 90 DAYS [SMA-II] • 04 -SUB STANDARD (IRREGULARITY FOR 90 DAYS AND ABOVE) • 05 -DOUBTFUL LESS THAN 1 YEAR (D1)-[SUBSTD>1 YEAR] • 06 -DOUBTFUL => 1 YR < 3 YRS (D2) • 07 -DOUBTFUL = > 3 YEARS (D3) • 08 -LOSS ASSETS

  7. ARREAR CONDITIONS • Conditions affecting asset quality are known as Arrear Conditions in CBS • Each arrear condition is assigned a distinct number • There are 26 such conditions

  8. ASSET TRACKING IN CBS • All asset accounts are tracked for the irregularity / arrear conditions during EOD every day. • Appropriate risk grade / IRAC status is assigned to all the accounts. • Such risk grade or Status is known as New IRAC Status • Also known as Indicative IRAC Status SBIICM HYDERABAD

  9. STAMPING • Updating the Actual (Old) IRAC Status with New IRAC Status by CBS • Takes place on stamping days

  10. RECENT DEVELOPMENT • IR NO: 76166 DATED 21-05-2016 • Up-gradation of accounts should happen on daily basis after satisfaction of all arrear conditions whereas accounts would be stamped as NPA only on the last date of each month. • In view of above, following two types of functionalities created for stamping process: • Up gradation Stamping on daily basis once all the arrear conditions are satisfied. • 2. Down gradation Stamping on the last date of every month.

  11. NPA TRACKING IN CBS

  12. TRACKING OF EMI DUES

  13. RECENT DEVELOPMENT Education Loan : One month before repayment start date, system will automatically move unpaid moratorium period interest to Principal Bucket and regenerate repayment schedule to avoid moratorium period interest getting converted into URI (Unrealised Interest) in case of an education loan turns NPA. SMS will be sent to borrower advising the new EMI amount. A report will be generated and sent to Branches for their information and record.

  14. RECENT DEVELOPMENT • EDUCATION LOAN : REPAYMENT SCHEDULE:- Regeneration of repayment schedule during moratorium period in Education Loans has been restricted. • Repayment schedule would be regenerated by the system (CBS) itself on the last day of the moratorium period with accrued interest and EMI would be arrived at.(ii) System would also generate and send one SMS to the borrower informing that "Your Education Loan EMI of Rs.... is due for payment from...(date).Contact Branch/RACPC for further clarifications".(iii) CBS would generate one report every month on 25th advising the "Education Loans First EMI falling due during the next month".

  15. RECENT DEVELOPMENT • (iv) The function of Changing the TERM and Regeneration of repayment schedule during holiday period i.e. Course Period + Moratorium period has been disabled and if the tellers attempt to regenerate repayment schedule during the moratorium period, the system would display message that "Moratorium Period Not Yet Over” • STAMPING: The EMI accounts shall be stamped NPA on quarterly basis on balance sheet dates i.e. 30th June, 30th Sept., 31st Dec and 31st March. However, CBS shall track accounts on daily basis and place it in risk group RG-0 to RG-8 and during the quarter the status of NPA account would be as Indicative NPA which shall get classified as NPA as on Quarter end only if it continues to have three or more EMIs outstanding. The up gradation of all such accounts will be upgraded only on recovery of all the arrears/EMIs.

  16. RECENT DEVELOPMENT STAMPING: The EMI accounts shall be stamped NPA on quarterly basis on balance sheet dates i.e. 30th June, 30th Sept., 31st Dec and 31st March. However, CBS shall track accounts on daily basis and place it in risk group RG-0 to RG-8 and during the quarter the status of NPA account would be as Indicative NPA which shall get classified as NPA as on Quarter end only if it continues to have three or more EMIs outstanding. The up gradation of all such accounts will be upgraded only on recovery of all the arrears/EMIs.

  17. TRACKING INTEREST NON SERVICING

  18. A separate input menu 'Interest repayment start date' to be provided in Negotiated Repayment option screen. For interest portion, tracking of irregularity in the account should start as and when interest is applied after start date of interest repayment.

  19. TRACKING AGE OF STOCK STATEMENT

  20. RECENT DEVELOPMENT LOANS: Stock statement : Additional field for capturing stock statement month and year along with the date of receipt of the Stock Statement has been made available in CBS.

  21. TRACKINGRENEWAL OVERDUE

  22. RECENT DEVELOPMENT • Renewal / review profile set up made mandatory at the time of opening of account itself at product level and NPA tracking for non-renewal / review enabled in CBS.

  23. TRACKING OUT OF ORDER (O/S > DP/THEO BAL)

  24. THEORETICAL BALANCE • Similar to Drawing Power in CC /OD • Disbursements + Interest applied – Scheduled Repayments (Principal + Interest) i.e. as per sanction terms

  25. THEORETICAL BALANCE • Calculate Theoretical Balance • Loan Limit & disbursement Rs.5,00,000 • Interest applied in the account Rs. 8,000 • Repayment (EMI) per month Rs. 4,000 • Assume 10 months have elapsed, since commencement of repayment. • Assume Upfront fee of Rs.5000 is levied. • What is the Theoretical Balance for this account ? • Disbursement Rs.5,00,000 • Add Interest Rs. 8,000 • Minus scheduled repayments (4000 X 10) Rs. 40,000 • Theoretical Balance Rs.4,68,000 • Upfront fee is recoverable upfront- NOT a part of Theoretical Balance

  26. TRACKINGSECURITY EROSION

  27. RECENT DEVELOPMENT CPPD Requirement: Following functionality need to be developed in respect of valuation of Collateral securities. CPPD has advised as under. • The ‘Expiry Date’ field should be masked in case of Collateral Type 1 and Collateral Type 2. • Name of the field ‘Commencement Date / Stock Statement Date’ should be changed to ‘Valuation Report Date / Stock Statement Date’ and to be made mandatory. A validation will be put so that Valuation Report Date/Stock Statement Date will not be a future date or past date exceeding three years. SBIICM HYDERABAD

  28. RECENT DEVELOPMENT • On completion of 2 years 10 months from the Valuation Report date, reminder alert to be generated, bringing the impending expiry date to the attention of the operating functionaries. Such alerts to continue to be generated, say weekly, till such time fresh valuation report date is entered. • On completion of 3 years from valuation report date, system should not auto-zeroise the collateral security value. Reminders should continue to be generated, this time daily, till such time the fresh valuation report date is fed by the operating units. SBIICM HYDERABAD

  29. RECENT DEVELOPMENT SUBSIDY LINKED LOAN ACCOUNTS: Where loan is linked to subsidy account, system would prompt teller for subsidy appropriation whenever NPA account is transferred to Recalled Assets Account. SBIICM HYDERABAD

  30. TRACKING AGE OF NPAs

  31. AUTO UPGRADATION • On regularization of all arrear conditions • Auto upgradation takes place during EOD • New IRAC Status will be upgraded • On stamping day Old IRAC Status will be updated with upgraded New IRAC Status

  32. INCOME RECOGNITION • Income recognition in Non Performing Assets is based on record of recovery • On classification as NPA the unrealized portion of the interest is reversed • Interest application stops in these accounts • Interest accrual continues at applicable rate • Interest rate should not be made as ‘Zero’

  33. O/S Rs. 655060 A/C IS STANDARD

  34. Unrealized Interest of Rs.40,000 reversed in the account and the Amount transferred to Interest accrued bucket i.e. 655060 MINUS 40000 615060

  35. UNREALIZED INTEREST REVERSED & CREDITED NARRATION

  36. RECOVERY IN NPAsPRIORITY OF APPROPRIATION • Charges Pending • Penal Interest Pending • Interest Pending • Principal Pending SBIICM HYDERABAD

  37. PROVISIONING • STD ASSETS- AGL,MICRO,SMALL ENTERPRISES 00.25% • STD ASSETS-OTHERS 00.40% • COMMERCIAL REAL ESTATE 01.00% • TEASER LOANS 02.00% • SUB STD 15.00% • SUB STD UNSECURED AB INITIO 25.00% • If the Flag Unsecured ab initio is not marked “Y” 100.00 % • DOUBTFUL D1 25% ON SECURED+100% ON UNSECURED • DOUBTFUL D2 40% ON SECURED+100% ON UNSECURED • DOUBTFUL D3 100% • LOSS ASSETS 100% SBIICM HYDERABAD

  38. NPA ENQUIRY FUNCTIONS SBIICM HYDERABAD

  39. NPA STATUS ENQUIRY SBIICM HYDERABAD

  40. NPA STATUS ENQUIRY ALL ARREAR CONDITIONS TRACKED CAN BE SEEN HERE

  41. RECTIFICATION OF NON FINANCIAL ARREAR CONDITIONS-RENEWAL DOUBLE CLICK

  42. RISK GRADE HISTORY ENQUIRY

  43. RISK GRADE HISTORY ENQUIRY DURING EOD AMENDMENT AT FRONT END BY USER

  44. NPA Norms for Agricultural Accounts SBIICM HYDERABAD

  45. Planting season DUE DATE Remains unpaid Not paid NPA 31.01.2016 June 2015 2 seasons of 1year each 31.01.2018 NPA RECKON DATE short duration Mono- Cropping (for KHARIF)

  46. Planting season DUE DATE Remains unpaid Not paid NPA 31.07.2016 Oct 2015 2 seasons of 1year each 31.07.2018 NPA RECKON DATE- short duration Mono- Crop (for RABI SEASON) ABU, CC, Mumbai

  47. Sanction of Loan Due for payment Remains unpaid Not Paid NPA 31.07.2016 2 seasons of 6 monthseach 31.07.2015 (ASSUME) 31.01.2017 NPA RECKON DATE for short duration Double Cropping (KHARIF& RABI)

  48. FIRST DEBIT INTEREST APPLICATION START DATE • To coincide with the due date SBLC/TIRUCHIRAPALLI/VTV

  49. RECENT CHANGES • AGRICULTURE QUICK GOLD LOAN : Provision for capturing interest subvention details is made mandatory in Agri Quick gold loan screen and Loan Term plus Crop period should not exceed Maximum product level term. SBIICM HYDERABAD

  50. GRANTING NPA HOLIDAY SBIICM HYDERABAD

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