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?

    <p>To require fintech companies to cover some losses of banker if borrower defaults</p> Signup and view all the answers

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

    <p>To promote transparency, fair competition, and ethical practices in the fintech industry</p> Signup and view all the answers

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

    <p>Relief to banks and enabling them to focus on expansion and financial inclusion</p> Signup and view all the answers

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

    <p>To partially pay the bid amount to Bad Bank</p> Signup and view all the answers

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

    <p>The Union Government provides a sovereign guarantee</p> Signup and view all the answers

    What is the primary challenge of the Bad Bank framework?

    <p>Losses paid by owners of NARCL &amp; IDRCL, and taxpayers' money used for the government's guarantee to Security receipts</p> 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?

    <p>₹2L Cr</p> Signup and view all the answers

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