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Questions and Answers
When is a Direct Agricultural loan considered a non-performing asset (NPA) for short duration crops?
When is a Direct Agricultural loan considered a non-performing asset (NPA) for short duration crops?
- When the bill remains overdue for more than 90 days
- When the Interest or instalment remains overdue for 2 crop seasons (correct)
- When the loan is not reviewed within 180 days
- When stock statement has not been received for more than 90 days
What is considered a non-performing asset (NPA) for a Cash Credit or Overdraft Account?
What is considered a non-performing asset (NPA) for a Cash Credit or Overdraft Account?
- When the limit is not reviewed within 180 days
- When the account remains 'out of order' for more than 90 days (correct)
- When stock statement has not been received for more than 90 days
- When the bill remains overdue for more than 90 days
When can credit facilities backed by the Guarantee of Central Govt. be treated as a non-performing asset (NPA)?
When can credit facilities backed by the Guarantee of Central Govt. be treated as a non-performing asset (NPA)?
- When the Govt. repudiates its guarantee (correct)
- When the loan is not reviewed within 180 days
- When stock statement has not been received for more than 90 days
- When the bill remains overdue for more than 90 days
What condition must be met for a loan account to be considered a non-performing asset (NPA)?
What condition must be met for a loan account to be considered a non-performing asset (NPA)?
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What action triggers the classification of a bill as a non-performing asset (NPA)?
What action triggers the classification of a bill as a non-performing asset (NPA)?
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Study Notes
Non-Performing Assets (NPA)
- A Direct Agricultural loan is considered a non-performing asset (NPA) for short duration crops when the installment of principal or interest remains overdue beyond 2 crop seasons.
- A Cash Credit or Overdraft Account is considered a non-performing asset (NPA) if the account remains out of order for a period of 90 days.
- Credit facilities backed by the Guarantee of Central Govt. can be treated as a non-performing asset (NPA) when the guarantee is invoked and the borrower fails to repay the debt.
- A loan account is considered a non-performing asset (NPA) when the interest and/or installment of principal remain overdue for a period of 90 days or more.
- A bill is classified as a non-performing asset (NPA) when the bill remains overdue for a period exceeding 90 days from the due date.
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