1

NON BANKING FINANCIAL COMPANIES

Solution 1
Statement showing computation of 'Owned Fund'
In Lakhs
Paid up Equity Capital 150
Free Reserves 250
Compulsory Convertible Preference Shares 50
Owned Fund 450

Solution 2
Calculation of provision required on advances as per the Non-Banking Financial Company – Non-
Systemically Important Non Deposit taking Company (Reserve Bank) Directions, 2016
Amount in Provision % Provision in
Lakhs Lakhs
Standard assets 84,000 0.25 210
Sub-standard assets 6,700 10 670
Secured portions of doubtful debts:
- upto one year 1,600 20 320
- one year to three years 450 30 135
- more than three years 150 50 75
Unsecured portions of doubtful debts 485 100 485
Loss assets 240 100 240
2,135

Calculation of provision required on advances as per the Non-Banking Financial Company -

Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank)
Directions, 2016
Amount in Provision % Provision in
Lakhs Lakhs
Standard assets 84,000 0.40 336
Sub-standard assets 6,700 10 670
Secured portions of doubtful debts:
- upto one year 1,600 20 320
- one year to three years 450 30 135
- more than three years 150 50 75
Unsecured portions of doubtful debts 485 100 485
Loss assets 240 100 240
2,261

Solution 3
Calculation of provision required on advances as on 31st March, 2021 as per the Non-Banking Financial
Company - Systemically Important Non-Deposit taking Company and Deposit taking Company
(Reserve Bank) Directions, 2016

Amount in Provision % Provision in

Lakhs Lakhs
Standard assets 13,400 0.40 53.60
Sub-standard assets 670 10 67
Secured portions of doubtful debts:
- upto one year 160 20 32
The copyright of these notes is with C.A. Nitin Goel
No part of these notes may be reproduced in any manner without his prior permission in writing
 2
- one year to three years 45 30 13.50
- more than three years 20 50 10
Unsecured portions of doubtful debts 48 100 48
Loss assets 24 100 24
248.10

Solution 4
Statement showing classification as per Non-Banking Financial Company - Systemically Important Non-
Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016

₹ In Lakhs
Standard Assets
Accounts (Balancing figure) 172
400 accounts overdue for a period for 2 months 80
24 accounts overdue for a period by 3 months 48 300
Sub-Standard Assets
4 accounts identified as sub-standard asset for a period less than 12 months 28
Doubtful Debts
6 accounts identified as sub-standard for a period more than 12 months 12
4 accounts identified as sub-standard for a period more than 3 years 40 52
Loss Assets
20
1 account identified by management as loss asset
Total overdue 400

Solution 5
Amount of provision to be made is as under:
Asset Funded Category Provision Rate Working Provision
Amount(crores)
Computers Where hire charges Nil Nil -
are overdue upto 12
months
Televisions Where hire charges 10% of the net book 4,950*10% 495
are overdue for value
more than 12
months but upto 24
months
Washing Where hire charges 40% of the net book 2,530*40% 1,012
Machines are overdue for value
more than 24
months but upto 36
months
Refrigerators Where hire charges 70% of the net book 1,328*70% 929.60
or lease rentals are value
overdue for more
than 36 months but
upto 48 months
Air Conditioners where hire charges 100% of the net 305*100% 305
or lease rentals are book value
overdue for more
than 48 months
2,741.60

The copyright of these notes is with C.A. Nitin Goel

No part of these notes may be reproduced in any manner without his prior permission in writing