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Banking: Wilful Defaulters and Loan Repayment

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Questions and Answers

What is the primary objective of NARCL in resolving stressed loans?

To provide relief to taxpayers
To regulate fintech companies
To provide financing to borrowers
To resolve stressed loans above ₹500Cr (correct)

What is the role of the Union Government in the Bad Bank framework?

To regulate fintech companies
To provide financing to borrowers
To resolve stressed loans
To provide sovereign guarantee for Security Receipts (correct)

What is the primary benefit of the Bad Bank framework for individual banks?

Increased Basel-III capital requirements
Increased digital lending
Reduced losses due to NPA resolution (correct)
Regulation of fintech companies

What is the purpose of the FIRST LOSS DEFAULT GUARANTEE (FLDG) norm introduced by RBI?

To require fintech companies to cover some losses of banker if borrower defaults (B) Signup and view all the answers

What is the role of a Self-Regulatory Organisation (SRO) in the fintech industry?

To promote transparency, fair competition, and ethical practices in the fintech industry (B) Signup and view all the answers

What is the benefit of the Bad Bank framework for the banking system as a whole?

Relief to banks and enabling them to focus on expansion and financial inclusion (B) Signup and view all the answers

What is the role of Security Receipts (SR) in the Bad Bank framework?

To partially pay the bid amount to Bad Bank (C) Signup and view all the answers

What is the consequence of Bad Bank dishonouring SR payment deadlines?

The Union Government provides a sovereign guarantee (D) Signup and view all the answers

What is the primary challenge of the Bad Bank framework?

Losses paid by owners of NARCL & IDRCL, and taxpayers' money used for the government's guarantee to Security receipts (B) Signup and view all the answers

What is the total amount of stressed loans stuck in the system, which the Bad Bank framework aims to resolve?

₹2L Cr (C) Signup and view all the answers

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