Q.

2 Aftab Ahmed (SME borrower – Car mechanic) obtained working capital financing from Askari Bank in
September 2014. He defaulted on his installment (principal + mark-up) due on March 31, 2015. The bank’s
outstanding exposure at the time of default was Rs. 7.25 million. Aftab Ahmed pledged stock with the bank
amounting to Rs. 6.50 million (FSV of Rs. 5 million) and mortgaged residential property with the bank
amounting to Rs. 9 million (FSV of Rs. 7 million). On September 26, 2018, the bank received fresh
valuation (from PBA approved evaluator) for residential property of Mr. Aftab, market value Rs. 11.6
million (FSV of Rs. 10 million). The manager of SME departments asks you to provide complete schedule
of classification and provisioning? The total staff at borrower’s workshop was 9 and annual sales turnover
was PKR 25 million.

Category Date of classification Principal Collateral Diff Amount Accumulated Provision Required Provision
OAEM 30-Jun-15 7.2500 7.2500 0.0000 0.0000 0.0000
SS 30-Sep-15 7.2500 7.2500 0.0000 0.0000 0.0000
DF 31-Mar-16 7.2500 7.2500 0.0000 0.0000 0.0000
DF 30-Jun-16 7.2500 6.2000 1.0500 0.5250 0.5250
Loss 30-Sep-16 7.2500 6.2000 1.0500 1.0500 0.5250
Loss 30-Jun-17 7.2500 5.1500 2.1000 2.1000 1.0500
Loss 30-Jun-18 7.2500 2.1000 5.1500 5.1500 3.0500
Loss 30-Sep-18 7.2500 3.0000 4.2500 4.2500 -0.9000
Loss 30-Jun-19 7.2500 2.0000 5.2500 5.2500 1.0000
Loss 30-Jun-20 7.2500 0.0000 7.2500 7.2500 2.0000
Q.1 Due to heavy rains and massive floods of 2012 in Southern Punjab and Sindh Province, M/s. Abdul Ghani &
Water Mangoes & Dates Treatment (Fruit Processing) Plant’ was shut down. Consequently, the company unabl
principal & interest (installment) that was due on December 31, 2013. The outstanding principal of UBL Bank Li
time of default was Rs. 23 million. The bank has to create specific provision on this overdue loan as per time-based
forced sale value (FSV) of 'plant & machinery under charge' held as collateral was Rs. 19 million and ‘Industrial lan
Rs. 28 million. Further, after continuous follow up by the bank, the owner of fruit processing plant paid cash / Chequ
Rs. 3 million against the classified loan on December 26, 2016 (as a token for out-of-court settlement). Draw compl
of classification / provisioning. The number of employees in the factory were 80 with annual turnover of PKR 40 mil

Category Date of classification Principal Collateral Diff AmounAccumulated Provision

SS 31-Mar-14 23.0000 26.7000 -3.7000 0.0000
DF 30-Jun-14 23.0000 26.7000 -3.7000 0.0000
Loss 31-Dec-14 23.0000 26.7000 -3.7000 0.0000
Loss 31-Mar-15 23.0000 20.6000 2.4000 2.4000
Loss 31-Mar-15 23.0000 14.5000 8.5000 8.5000
Loss 31-Mar-16 23.0000 8.4000 14.6000 14.6000
Loss 31-Dec-16 20.0000 8.4000 11.6000 11.6000
Loss 31-Mar-17 20.0000 5.6000 14.4000 14.4000
Loss 3/31/2018 20.0000 0.0000 20.0000 20.0000
Province, M/s. Abdul Ghani & Sons’ ‘Hot
sequently, the company unable to pay its
ing principal of UBL Bank Limited at the
verdue loan as per time-based criteria. The
. 19 million and ‘Industrial land’ FSV was
cessing plant paid cash / Cheque to UBL of
court settlement). Draw complete schedule
nnual turnover of PKR 40 million.

ed Provision Required Provision

0.0000
0.0000
0.0000
2.4000
6.1000
6.1000
-3.0000
2.8000
5.6000