A claim of Rs. 60 lacs has been settled by ECGC in favour of a bank against default of Rs. 80 lacs.

A claim of Rs. 60 lacs has been settled by ECGC in favour of a bank against default of Rs. 80 lacs. Subsequently the bank realizes Rs. 20 lacs with the collaterals available to the loan. What is the loss suffered by the bank on this loan? a. Rs. 25 lacs b. Rs. 20 lacs c. Rs. 15 lacs d. Rs. 10 lacs Ans – c Explanation : ECGC had settled Rs. 60 lacs on default of 80 Lacs (That is 75% of the default amount) But Subsequent to that settlement, Rs. 20 lacs was realised through the security held. So, the claim amount from ECGC should be, 60 Lacs only from ECGC. And the ECGC had settled only 75 % of the claim amount. So, the settlement amount will be, 75% of Rs. 60 lacs = 6000000 x 75/100 = 45 lacs So, total realised value = 4500000 + 2000000 = 6500000 (out of 80 lacs) So, the bank had suffered loss Rs. 15 lacs on this loan.