It is a requirement under the circular that interest on loans that have been provisioned or loans where the interest is over due for 90 days or longer should be debited to the loan account and credited to a suspense account and not to the profit and loss account.

The bank, however, can still take the interest to the profit and loss account where the net realizable value of collateral continues to exceed the outstanding balance of the loan. This assessment should be made at least quarterly. Any cash payments made by the customer can also be recognized in Profit and Loss Account only after the overdue principal amount has been satisfied.

Interest suspense account should be clearly documented with clear audit trails showing interest movement. The account will be examined by the Central Bank.