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1. Non Performing Asset means an asset or account of
borrower, which has been classified by a bank or
financial institution as sub-standard, doubtful or
loss asset, in accordance with the directions or
guidelines relating to asset classification issued by
The Reserve Bank of India.
Contents
1 Thirty days past due
2 Ninety days overdue
3 Out of order
4 Overdue
Thirty days past due
An amount due under any credit facility is treated as "past
due" when it has not been paid within 30 days from the due
date. Due to the improvement in the payment and
settlement systems, recovery climate, upgradation of
technology in the banking system, etc., it was decided to
dispense with 'past due' concept, with effect from March
31, 2001. Accordingly, as from that date, a Non performing
asset (NPA) shall be an advance where:
1. interest and /or installment of principal remain
overdue for a period of more than 180 days in respect
of a Term Loan,

2. 2. the account remains 'out of order' for a period of more
than 180 days, in respect of an overdraft/ cash
Credit(OD/CC),
3. the bill remains overdue for a period of more than 180
days in the case of bills purchased and discounted,
4. interest and/ or installment of principal remains
overdue for two harvest seasons but for a period not
exceeding two half years in the case of an advance
granted for agricultural purpose, and
5. any amount to be received remains overdue for a
period of more than 180 days in respect of other
accounts.
Many institutions now try to sell their non-performing
assets thru companies like KIM-LAR, INC. which helps
facilitate the sale of these bundled portfolios. The non-
performing assets often include mortgage loans, car loans,
credit card debt and installment loans.
Ninety days overdue
With a view to moving towards international best practices
and to ensure greater transparency, it has been decided to
adopt the '90 days overdue' norm for identification of
NPAs, form the year ending March 31, 2004. Accordingly,
with effect form March 31, 2004, a non-performing asset
(NPA) shell be a loan or an advance where:
1. interest and /or installment of principal remain
overdue for a period of more than 90 days in respect
of a Term Loan,

3. 2. the account remains 'out of order' for a period of more
than 90 days, inrespect of an overdraft/ cash
Credit(OD/CC),
3. the bill remains overdue for a period of more than 90
days in the case of bills purchased and discounted,
4. interest and/ or installment of principal remains
overdue for two harvest seasons but for a period not
exceeding two half years in the case of an advance
granted for agricultural purpose, and
5. any amount to be received remains overdue for a
period of more than 90 days in respect of other
Out of order
An account should be treated as 'out of order' if the
outstanding balance remains continuously in excess of the
sanctioned limit/ drawing power. In case where the
outstanding balance in the principal operating account is
less than the sanctioned limit/ drawing power, but there are
no credits continuously for six months as on the date of
balance sheet or credits are not enough to cover the interest
debited during the same period, these account should be
treated as 'out of order'.
Overdue
Say the due date for any pament is 4 th of September 2008
but the customer is not paying the amount by this date, this
amount will be shown as overdue in the cibil.

4. China Development Bank (the "Bank" or "CDB") is
under the direct leadership of the State Council. It is
dedicated to the mission of strengthening the
competitiveness of our country and improving the
living standards of our people.
CDB has always been a strong supporter of the
State's macroeconomic policies and has assumed an
active role in raising and channelling funds to alleviate
the bottleneck restraints to the development of the
economy and society. The Bank is dedicated to
promoting the development of the market through
well-planned and balanced financing efforts that
support development of the State's key projects and
construction in the infrastructure sector, basic
industries, pillar industries and high-technology
industry. In support of the State's policies to
implement disciplined development and build a
harmonious society, the Bank's funding efforts also go
to constrained sectors, including urbanization, SMEs,
agriculture, rural communities and farmers, education,
medical and health care and environmental
protection. In answer to the call of the State to
encourage domestic enterprises to "Go Global", the
Bank engages in a wide range of international
cooperative activities.

5. Summary of 2004 Operating
Performance
In 2004 CDB maintained and strengthened its market
performance in the process of resolutely carrying out
national macroeconomic adjustment policies and measures,
with major operation indicators standing at internationally
advanced levels for three consecutive years. As of the end
of 2004, the bank's credit assets amounted to RMB1378.6
billion, with current principal and interest recovery ratio of
99.77%, the indicator having maintained world-leading
performance for 20 consecutive quarters; the bank's non-
performing loan ratio stood at 1.21%, down a year-on-year
0.13 percentage points; the coverage ratio of its risk
reserves against non-performing loans hit 285%, and; its
capital adequacy ratio reached 10.51%.
"Double reductions" of nonperforming asset percentage and
nonperforming loan percentage were achieved on the basis
of the leading level in 2004. CDB achieved "double
reductions" in nonperforming loan percentage and amount

6. for 4 successive years from 1998 to 2002. From 2002,
nonperforming loan percentage of CDB gradually acquires
stability, fluctuating slightly within the scope of 3% to
0.5% for 3 successive years, which coincides with the
situations of the international leading banks after entering
a stable period. In the past six years, CDB continuously
reduced its nonperforming loan percentage and
nonperforming asset percentage, and reached the
international leading level in terms of major operation
indicators. In 2004, CDB was ranked as one of the most
profitable banks in Asia by International Finance.
As the development financing institution of the
government, CDB actively developed new thoughts,
promoted asset management, and brought along other
financial institutions and social capital to jointly support the
construction of key projects that concerned the regional
development in the past year. In 2004, in order to solve the
"bottleneck" that chocked the development of economy,
66% of the new loans of CDB were extended to "coal,
electricity, oil and transportation areas". In promised loans
that were examined, those of electricity, railway, telecom,
highway, public facility, oil, petrifaction and other main
industries accounted for 82% in the whole year. Loans
extended to middle-western areas and old industrial centers
in the northeast amounted to nearly 52% of the total. The
key credit projects CDB supported include: national
petroleum storage, South-to-North Water Transfers, Beijing
Olympic, and Shanghai World Expo. At the same time,
CDB reinforces its cooperation with relevant departments,
and plays an active role in the development & planning of

7. the cities in the western area of China such as the Yangtze
delta region, Beijing, Tianjin and Hebei, etc.
Summary of 2003 Operating
Performance
In 2003, CDB firmly carried out the macro-economic
policies of the state, aggressively deployed its development
financing role in the state's macro-regulation work,
energetically supported national economic
development and restructuring, and consistently
promoted credit building and financing and investment
system building. CDB has maintained and solidified
its leading market-based performance, and has made
new progress in all of its work, achieving its best ever
operating results.
Asset quality at the bank has been improving
continuously. As of the end of 2003, the NPL ratio,
measured under the five-class assets classification
method, stood at 1.34%, down 0.44% from
the beginning of the year. The NPA ratio stood at
1.88%, down 0.61% from the beginning of the year.
CDB continues to deliver a high standard of asset
management performance. In 2003, the current
principal and interest recovery ratio and the
cumulative principal and interest recovery ratio hit
99.88% and 99.19%, respectively. The current
principal and interest recovery ratio has maintained

8. world-leading performance for 16 quarters in a row.
For the first time in its history, the current and
cumulative principal and interest recovery ratios of the
bank have both exceeded 99%.
CDB has further enhanced its risk prevention
capability. Risk reserves to NPAs and risk reserves
to NPLs have posted a coverage ratio of 159% and
229%, respectively. Capital adequacy ratio stands at
10.11%.
ACCOUNTS ASSIGNMENT
REPORT OF NON PERFORMING ASSETS OF
CHINA DEVELOPMENT BANK IN THE YEAR
2003 AND 2004

9. BY
Joseph Thomas Mechery 07DO806
Mathews Varghese Tharakhan 07D0810
Nirmal Antony 07D0812
Philip Cyriac 07D0814
Rachna.R.Belagodu 07DO848

10. BY
Joseph Thomas Mechery 07DO806
Mathews Varghese Tharakhan 07D0810
Nirmal Antony 07D0812
Philip Cyriac 07D0814
Rachna.R.Belagodu 07DO848