International Bank has provided the following information relating to its advance portfolio as on Ma

International Bank has provided the following information relating to its advance portfolio as on Mar 31, 2015: Total advances Rs.40000 cr. Gross NPA 9% and Net NPA 2%. Based on this information, answer the following questions? 01. Considering that all the standard loan accounts represent general advances, what is the amount of provision for standard loan accounts: a) Rs.160 cr b) Rs.151.90 cr c) Rs.145.60 cr d) Rs.141.50 cr 02. What is the provision on NPA accounts? a) Rs.3600 cr b) Rs.3200 cr c) Rs.2800 cr d) Incomplete information. Cannot be calculated. 03. What is the total amount of provisions on total advances,including the standard accounts? a) Rs:3612.30 cr b) Rs.2945.60 cr c) Rs.2840.20 cr d) Incomplete information. Cannot be calculated. 04. What is the amount of gross NPA ? a) Rs.4000 cr b) Rs.3600 cr c) Rs.3200 cr d) Rs.2800 cr 05. What is the amount of net NPA? a) Rs.800 cr b) Rs.1000 cr c) Rs.1200 cr d) Incomplete information. 06. What is the provision coverage ratio for NPA? a) 70% b) 74.3% c) 75.2% d) 77.8% 07. What is the minimum amount of provisions to be maintained by the bank to meet the provisioning coverage ratio of 70%? a) Rs.3600 cr b) Rs.3200 cr c) Rs.2880 cr d) Rs.2520 cr Answers: 1-c 2-c 3-b 4-b 5-a 6-d 7-d Explanations: Que-1: Standard account Total = 40000 cr — 9% NPA = 3600 cr. = 40000 — 3600 = 36400 cr. Provision at 0.4% = 36400 x 0.4% = 145.60 cr Que-2: Provision on NPA = Gross NPA 9% - net NPA 2% = 7% i.e. 40000 x 7% = 2800 cr. Que-3: Provision on NPA = Gross NPA 9% - net NPA 2% = 7% i.e. 0000 x 7% = 2800 cr. Provision on standard accounts Rs.145.60 cr. Hence total provision = 2945.60 cr. Que - 4 : 40000 x 9% = 3600 cr Que - 5 : 40000 X 2% = 800 cr Que - 6 : Total provision on NPA / Gross NPA = 2800/3600 = 77.8% Que - 7 : Gross NPA x 70% = 3600 x 70% = 2520 cr