Rescheduled loans may be put into any category of classification by the bank
considering the existing financial soundness
and repayment capacity of
the borrower, subject to the accumulated amount in interest suspense account not
being taken into income account, unless
actually realized. Upon classification, applicable provisions have to be maintained, according to the Master Circular: Loan Classification and Provisioning (BRPD Circular No. 14/2012). However, a rescheduled loan will not be considered a "defaulted loan," and the borrower will not be considered a "defaulted borrower" as
these terms
are understood in the context of
section 27KaKa(3)
of the Banking Companies
Act, 1991, unless such
loan has not been repaid after reaching the maximum number
of allowable
reschedulings.
Interest accrued on rescheduled loans
will be subject to the
accounting treatment that is appropriate for the classification category of
the
loan, in line with the Master Circular: Loan Classification and Provisioning
(BRPD Circular
No.
14/2012)
just as if the loan had not been rescheduled.