Restructuring of cases :
RBI has given guidelines for treatment of restructured accounts in part B of the Master Circular on Prudential Norms on Income Recognition, Assets Classification and Provisioning Pertaining to Advances dated July 1, 2015. The provisions of this Circular has been discussed earlier in the Chapter. The auditor should verify compliance with the requirements of the said circular.
Once the bank receives an application/proposal in respect of an account for restructuring, it implies that the account is intrinsically weak. Thereby during the time the account remains pending for restructuring, the auditors need to take a view whether provision needs to be made in respect of such accounts pending approval for restructuring.