- Objective
The objective of this policy is to establish a clear and transparent framework for writing off overdue loan accounts that have become non-recoverable or whose likelihood of recovery is significantly diminished. This policy ensures prudent accounting practices and provides a realistic presentation of the Company’s financial position. - Scope
This policy applies to all loan portfolios of R.K. Bansal Finance Private
Limited, including personal loans, business loans, and any other financial
products extended to customers under the Company’s lending operations. - Policy Rationale
Based on internal recovery performance and past trends, it has been
observed that once an account remains overdue for more than 30 days, the
recovery rate falls below 25% in such cases.
Accordingly, to ensure a more stringent and realistic reflection of asset quality,
and to align with prudent financial reporting and provisioning norms, the
Company shall adopt an early recognition and write-off mechanism as set out in this policy. - Written-Off Criteria
An account shall be considered for write-off if it meets the following criteria:
– The account is overdue for more than 30 days from its due date.
– The probability of recovery, based on the internal collection assessment, is less than 25%.
– The account has already been classified as NPA (Non-Performing Asset) as per the internal or applicable regulatory norms. - Nature of Write-Off
- The write-off shall be effected only in the books of accounts of the
Company. - Such write-off does not constitute a waiver of the Company’s legal right to
recover the dues. - Recovery efforts, including legal action, collection follow-ups, or settlement
negotiations, may continue even after the loan is written off in the books.
- Accounting Treatment
– Upon write-off, the outstanding principal and accrued interest (if any) shall be removed from the books by debiting the Loan Loss Provision Account.
– Any subsequent recoveries from written-off accounts shall be recognized as Other Income / Recovery from Written-Off Accounts in the period in which they are realized. - Review and Reporting
– The status of written-off accounts shall be reviewed on a quarterly basis by the management.
– A summary report of write-offs and subsequent recoveries shall be placed
before the Board of Directors for noting and oversight.
– The policy shall be reviewed annually or as and when required to ensure its continued relevance and alignment with regulatory and business needs. - Effective Date
This policy shall come into effect from 21 st April 2025 and shall remain in
force until amended or replaced by the Board of Directors.
Approved By:
Board of Directors
R.K. Bansal Finance Private Limited
Date: April 21, 2025