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COM 4 (C)

i. Adit enterprise took out a loan of 50 lac from Loyal Bank Ltd. There is 10 lac of unrealized interest in an interest suspense account. ii. Eligible collateral includes: 30 lac mortgaged land, 10 lac pledged goods, 10 lac deposit under lien. The 10 lac tin shed is not eligible collateral. iii. The total value of eligible collateral is 30 lac (15 lac from land + 5 lac from goods + 10 lac from deposit). The base for provision is 10 lac, which is the higher of the outstanding amount less collateral (50 lac - 10 lac interest - 30 lac collateral = 10 lac) or 15% of outstanding (15% of 50 lac =

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178 views

COM 4 (C)

i. Adit enterprise took out a loan of 50 lac from Loyal Bank Ltd. There is 10 lac of unrealized interest in an interest suspense account. ii. Eligible collateral includes: 30 lac mortgaged land, 10 lac pledged goods, 10 lac deposit under lien. The 10 lac tin shed is not eligible collateral. iii. The total value of eligible collateral is 30 lac (15 lac from land + 5 lac from goods + 10 lac from deposit). The base for provision is 10 lac, which is the higher of the outstanding amount less collateral (50 lac - 10 lac interest - 30 lac collateral = 10 lac) or 15% of outstanding (15% of 50 lac =

Uploaded by

Shamima Akter
Copyright
© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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S. M.

Mahruf Billah

Credit Operations and Management: 4 (c) of 96th AIBB

Problem: Suppose, Adit enterprise took loan from Loyal Bank Ltd. The present loan outstanding is 50
lac. There is 10 lac taka unrealized interest in interest suspense account. Other collaterals are as
follows: (96th AIBB May-June 2023)
i. The value of mortgaged land is taka 30 lac.
ii. The value of a tin shed is taka 10 lac.
iii. The value of pledged goods is taka 10 lac.
iv. Taka 10 lac of deposit is kept lien against the loan.
What is the total value of eligible collateral and base for provision?
Solution: According to BRPD Circular No: 14 of 23 September 2012.
Note: Temporary houses including tin-shed structure shall not be shown as building.

So, Value of Collateral = Maximum 50% of the market value of land and building mortgaged with the
bank + 50% of the market value of easily marketable commodities kept under control of the bank +
100% of deposit under lien against the loan.
So, Value of collateral = (50% of 30 lac) + (50 % of 10 lac) + (100% of 10 lac)
= 15 + 5 + 10
= 30 lac
Base for provision = 50 lac – interest suspense – Value of eligible collateral
= (50 – 10- 30) lac
= 10 lac
Or,
= 15% of the total outstanding
= 15% of 50 lac
= 7.5 lac
Whichever is higher.
So, base for provision will be 10 lac.

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