Accounts
What are the four classifications of Bad and Doubtful Debts as per the context of the Bank?
Assets in Banks are Loans and Advances given to borrowers. These Assets are divided into 4 categories. They are
1. Standard Assets: These accounts are good and the borrower is repaying the loan as per stipulation and the security extended in good.
2. Substandard Asset: These accounts are good as per the security extended is good but the loans repayment is not up to the mark.
3. Doubtful Asset: These accounts have both the security as well the repayment stipulation in irregular method.
4. Bad Asset: These accounts are where the repayment is not forthcoming and the security extended becomes bad.
1. Standard Assets: These accounts are good and the borrower is repaying the loan as per stipulation and the security extended in good.
2. Substandard Asset: These accounts are good as per the security extended is good but the loans repayment is not up to the mark.
3. Doubtful Asset: These accounts have both the security as well the repayment stipulation in irregular method.
4. Bad Asset: These accounts are where the repayment is not forthcoming and the security extended becomes bad.
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