Common use of IRAC Circular Reference Para No Clause in Contracts

IRAC Circular Reference Para No. 4.2.7 (c) - Asset Classification to be borrower-wise and not facility-wise“Para No. 4.2.7.1 -It is difficult to envisage a situation when only one facility to a borrower/one investment in any of the securities issued by the borrower becomes a problem credit/ investment and not others. Therefore, all the facilities granted by a bank to a borrower and investment in all the securities issued by the borrower will have to be treated as NPA/NPI and not the particular facility/investment or part thereof which has become irregular. Example Description - NPA Classification on based on borrower wise and not facility wise. Example: If any Facility of customer is classified as NPA upon running day-end process as on date, all the facility of the customer need to be classified NPA upon same day. It is further explained as below mention table: Customer ID Facility Name Date NPA Reason A A A Term Loan 1 Term Loan 2 Cash Credit / Overdraft 29-Jun-21 29-Jun-21 29-Jun-21 NPA Classified as per above Example NPA Classified Due to Customer A Term Loan 1 is classified NPA NPA Classified Due to Customer A Term Loan 1 is classified NPA

IRAC Circular Reference Para No. 4.2.7 (c) - Asset Classification to be borrower-wise and not facility-wise“Para No. 4.2.7.1 -It is difficult to envisage a situation when only one facility to a borrower/one investment in any of the securities issued by the borrower becomes a problem credit/ credit/investment and not others. Therefore, all the facilities granted by a bank to a borrower and investment in all the securities issued by the borrower will have to be treated as NPA/NPI and not the particular facility/investment or part thereof which has become irregular. Example Description - NPA Classification on based on borrower wise and not facility wise. Example: If any Facility of customer is classified as NPA upon running day-end process as on date, all the facility of the customer need to be classified NPA upon same day. It is further explained as below mention table: Customer ID Facility Name Date NPA Reason A A A Term Loan 1 Term Loan 2 Cash Credit / Overdraft 29-Jun-21 29-Jun-21 29-Jun-21 NPA Classified as per above Example NPA Classified Due to Customer A Term ATerm Loan 1 is classified NPA NPA Classified Due to Customer A Term ATerm Loan 1 is classified NPA

IRAC Circular Reference Para No. 4.2.7 (c) - Asset Classification to be borrower-wise and not facility-wise“Para No. 4.2.7.1 -It is difficult to envisage a situation when only one facility to a borrower/one investment in any of the securities issued by the borrower becomes a problem credit/ credit/investment and not others. Therefore, all the facilities granted by a bank to a borrower and investment in all the securities issued by the borrower will have to be treated as NPA/NPI and not the particular facility/investment or part thereof which has become irregular. Example Description - NPA Classification on based on borrower wise and not facility wise. Example: If any Facility of customer is classified as NPA upon running day-end process as on date, all the facility of the customer need to be classified NPA upon same day. It is further explained as below mention table: Customer ID Facility Name Date NPA Reason A A A Term Loan 1 Term Loan 2 Cash Credit / Overdraft 29-Jun-21 29-Jun-21 29-Jun-21 NPA Classified as per above Example NPA Classified Due to Customer A Term Loan 1 is classified NPA NPA Classified Due to Customer A Term Loan 1 is classified NPA