With reference to the classification of Non-Performing Assets (NPAs) in Indian banking, consider the following statements: 1. An asset that remains in the NPA category for up to 12 months is termed a Sub-Standard Asset. 2. A Doubtful Asset refers to an NPA that has remained in that category for more than 12 months. 3. A Loss Asset is one where full recovery is certain, but the asset has been partially written off. Which of the statements given above is/are correct? |ForumIAS

[A] 1 and 2 only

[B] 2 and 3 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: A

Notes:

Explanation:

An asset becomes a Sub-Standard Asset if it remains NPA for ≤ 12 months.
If the asset remains NPA for > 12 months, it is classified as a Doubtful Asset.
A Loss Asset is uncollectible or has negligible value. Recovery is not certain, though some recovery may be possible. It is not defined by partial write-off.

Source- 11th NCERT: Economics: Indian Economic Development and TMH Indian Economy by Ramesh Singh

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