How to Calculate Byaj (Interest) at “₹ per 100 per Month” — With Examples
A simple guide to calculating interest the traditional Indian way — rate per ₹100 per month, counting days, yearly compounding and part payments — with worked examples.
“How much of our loan book is actually healthy?” is the question every society board should be able to answer in a minute. The NPA classification is the standard way to answer it.
What is an NPA?
A Non-Performing Asset is a loan on which instalments or interest have stayed overdue beyond a set period. For banks in India the commonly applied threshold is 90 days. Cooperative societies follow the norms prescribed by their regulator or Registrar of Cooperative Societies, which may differ by state and by type of society — always check the rules that apply to you.
The four asset classes
| Class | Typical meaning |
|---|---|
| Standard | Regular, or overdue for less than the NPA threshold. |
| Sub-standard | Has been an NPA for up to about 12 months. |
| Doubtful | Has stayed in the sub-standard category for about 12 months or more. |
| Loss | Considered uncollectible, though not yet fully written off. |
Each class usually requires a provision — money set aside from profit — at a percentage prescribed by the regulator. The worse the class, the higher the provision.
Why it matters
- True profit: interest on NPAs is often not counted as income until it is received.
- Early action: a loan that is 45 days overdue is much easier to recover than one at 300 days.
- Audit and grading: auditors look closely at the NPA percentage when grading a society.
Tracking it without a register
Done by hand, NPA tracking means going through every loan account at month end. In Society e-Banking you configure the overdue-day ranges once in NPA settings, and the Loan EMI Overdue and NPA Classification reports classify every loan automatically from the dues and repayments already recorded.
Five habits that keep NPAs low
- Review the overdue report every week, not every quarter.
- Call the member at the first missed EMI.
- Link loans to a saving or RD account so repayments can be transferred.
- Use guarantors, and keep their contact details updated.
- Do not restructure a loan just to hide it from the overdue list.