Provision

Sir, I have issue on the above subject.

If a bank close a staff loan account because the staff could not pay the loan as at the time he resigned from the bank, after few 2 years the ex staff requested to know the loan position but the bank replied and said the loan account. The bank stated that the staff was no longer indebted to the bank. After 4 years , the same staff asked for work experience letter but the bank reverted that she must pay back the loan which has bear interest that was ( * 5 ) of that loan.

How does this fit in international reporting of account as the auditor was told the said loan account that was closed was in compliance with the central bank regulation but was moved into the staff salary account bearing interest without the ex – staff awareness . Do we report the loan account as provision which the bank has already disclosed as close account ?

Thanks in advance