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Faq Od CC Npa

The RBI guidelines classify a CC/OD account as a Non-Performing Asset (NPA) if it meets specific criteria, such as exceeding the sanctioned limit for 90 days or failing to cover interest debited during that period. If classified as NPA, all withdrawals are frozen, and the account is reported to credit bureaus, impacting linked credit products as well. Upgrading from NPA status requires full repayment of all overdue amounts across all credit facilities held by the borrower.

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Nikhil Thomas
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63 views2 pages

Faq Od CC Npa

The RBI guidelines classify a CC/OD account as a Non-Performing Asset (NPA) if it meets specific criteria, such as exceeding the sanctioned limit for 90 days or failing to cover interest debited during that period. If classified as NPA, all withdrawals are frozen, and the account is reported to credit bureaus, impacting linked credit products as well. Upgrading from NPA status requires full repayment of all overdue amounts across all credit facilities held by the borrower.

Uploaded by

Nikhil Thomas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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FAQs on RBI guidelines on classification of CC/OD Accounts as Non-Performing Assets (NPA):

1. What are the conditions stipulated by RBI, basis which the overdraft facility will be classified as NPA (Non
performing Asset)?

As per RBI’s directive dated 12 Nov 2021 vide circular RBI/2021-2022/125 [Link].68/21.04.048/2021-22 &
subsequent clarification titled ‘Prudential norms on Income Recognition, Asset Classification and Provisioning
pertaining to Advances’ vide circular RBI/2021-2022/158 [Link].85/21.04.048/2021-22 dated 15 Feb 2022, a
CC/ OD shall be classified as NPA, if it meets any of the criterion below:

the outstanding balance in the CC/OD Account remains continuously in excess of the sanctioned limit/drawing
power for 90 calendar days, or
the outstanding balance in the CC/OD account is less than the sanctioned limit/drawing power but there are no
credits continuously for 90 calendar days, or
the outstanding balance in the CC/OD account is less than the sanctioned limit/drawing power but credits are
not enough to cover the interest debited during the previous 90 day calendar period.

2. How is my overdraft account impacted if in the 90 days calendar period the credit is not equivalent to interest
debited.

If credit is less than the interest debited in last 90 days calendar period, the overdraft account will be classified
as NPA along with all linked credit products that the customer holds with the said account.

3. What is the implication of the account being classified as NPA?

With immediate effect, if your Account is classified as NPA due to any of the above condition (s), all permissible
withdrawals will be suspended / frozen and your Account will be reported as a “Non-Performing Asset – NPA” to
the Credit Bureaus to comply with the RBI ordinance.

4. What happens to the other credit facilities granted by the Bank?

As per the RBI circular, RBI/2021-2022/104 [Link].55/21.04.048/2021-22, the NPA classification has
to be done at the borrower level and not facility wise. Therefore, if your CC/OD account is classified as NPA,
any other facility granted by the Bank will also be classified as NPA and reported accordingly to the Credit
Bureaus.

5. How will an NPA account and linked credit facilities get upgraded?

In case of borrowers having more than one credit facility from a lending institution, loan accounts shall be
upgraded from NPA to standard asset category only upon repayment of entire overdue amount of interest and
principal pertaining to all the credit facilities.
6. Will the 90 days credit shortfall be calculated at the end of every calendar month?

No, last 90 days will be calculated on a daily basis and any day where in the last 90 days credit is less than debit, the
account will become NPA.

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