Q. Consider the following statements regarding Non-Performing Assets (NPAs):
1.A loan is classified as a Non-Performing Asset (NPA) if the principal or interest payment remains overdue for a period of 180 days.
2.Substandard assets are those which have remained NPAs for a period not exceeding 12 months.
3.Loss assets are considered unrecoverable and are of such minimal value that they are no longer regarded as bankable assets.
Which of the above statements is/are correct?
Answer: B
Notes:
Explanation:
- As per RBI guidelines, a loan becomes an NPA if the overdue period is 90 days, not 180 days.
- Substandard assets are those which have remained NPAs for a period less than or equal to 12 months.
- Loss assets are those considered uncollectible and of such little value that they no longer qualify as bankable, though some recovery might be possible.
Source: Indian Economy (Ramesh singh)
