Banking · Income Recognition and Asset Classification

Which of the following statements correctly explains the income recognition policy in Indian banks as per RBI norms? Statement 1: Banks should recognize income from Non-Performing Assets (NPAs) on an accrual basis, even if the income has not been actually received. Statement 2: Interest on advances against term deposits, NSCs, IVPs, KVPs, and life policies is recognized on the due date, provided there is an adequate margin available in the accounts. Statement 3: Fees and commissions earned due to the renegotiation or rescheduling of outstanding debts should be recognized on an accrual basis over the period of the renegotiated credit extension. Statement 4: Banks should charge and take to the income account interest on NPAs, including in the case of Government guaranteed accounts.