The 6-months deferment ends in August 2020. Thus, the company needs to continue its installment for fixed asset financing in September 2020. The due date for the loan repayment is every 25^th of the month.

Explain the status of the fixed asset financing for each of the scenarios below, in accordance with the Guidelines for Classification and Impairment Provisions for Loans/ Financing issued by the Central Bank of Malaysia, dated 16 April 2015.

(i) The company doesn't pay the installment due on 25^th September 2020. What is the status of the account as at 30^th September 2020?

(3 marks)

(ii) The company still doesn't pay the subsequent installment due on 25^th October 2020, 25^th November 2020 and 25^th December 2020. What is the status of the account as at 31^st December 2020?

(3 marks)

(iii) As Credit Recovery Officer of the bank, formulate action can be taken by the bank in managing scenario (ii) above. Discuss TWO (2) reasons to support your proposed action.