Banking · NPA Accounting
Under the Prudential Norms prescribed by the RBI, how is interest income recognized on Non-Performing Asset (NPA) accounts in commercial banks?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1By waiving all interest completely from the books.
- 2By charging double interest as penal income in advance.
- 3On a cash basis, crediting Profit and Loss only when actually realized.✓
- 4On an accrual basis to reflect asset yield.
Correct answer
On a cash basis, crediting Profit and Loss only when actually realized.
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