Tattva Session 3 - RBI Provisions and Expected Credit Loss (ECL): Understanding their Interplay

[@nikh5522]

Dear Sir
Solicit your advise with respect to following query on income recognition on NPA cases.
RBI norms prescribe that any unrealised income on NPA cases needs to be reversed.In case of NBFC, who is preparing INDAS financials, two possible treatments emerge.
Option 1: Reverse the entire unrealised interest income on NPA's in line with RBI Master directions.
Or
Option 2: The entire interest income on NPA's (including unrealised) is shown as Interest Income in P&L account and corresponding ECL provision is made on interest income on NPA's.
Please advise which of the above two option nbfcs should follow.
Regards

[@vinodkotharicompany]

While both these approach are possible we would be inclined towards opting for option 1.
However, we would suggest you get to get professional opinion on the same with your consultant or reach to us at [e-mail] to understand further.

[@brijbalatuli5864]

Sir can non deposit taking nbfc's take Inter Corporate Deposits (ICD's) from Limited Liability Partnership (LLP)
Please advise

[@brijbalatuli5864]

Sir please guide

[@richa9658]

Sir if an NBFC has assets of more than 500 crores and is in the base layer of RBI, will it be considered as SI NBFC or NSI NBFC. Please reply

[@vinodkotharicompany]

The NBFC will have to comply with NBFC-NSI Master Directions. We have discussed the same in detail in Session 1 of this series.

[@nikh5522]

Dear Sir
Kindly advise
Regards