BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A fixed asset of Bank is not been utilized
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A portion of deposits not been utilized
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A loan asset on which interest and/or instalments not paid for a period of more than 90 days
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All of the Above
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Detailed explanation-1: -In general, loans become NPAs when they are outstanding for 90 days or more, though some lenders use a shorter window in considering a loan or advance past due. A loan is classified as a non-performing asset when it is not being repaid by the borrower.
Detailed explanation-2: -If the interest or principal remains overdue for a period 90 days or three months and above the loan account is classified as a Non-Performing Asset (NPA). Once an asset is classified as NPA, it will move back to ‘Standard’ category if the DPD (days past due) count comes to ‘0’ DPD.
Detailed explanation-3: -NPAs can be classified as a substandard asset, doubtful asset, or loss asset, depending on the length of time overdue and probability of repayment. Lenders have options to recover their losses, including taking possession of any collateral or selling off the loan at a significant discount to a collection agency.
Detailed explanation-4: -An asset is classified as a sub-standard asset if it remains as an NPA for a period less than or equal to 12 months. An asset is classified as a doubtful asset if it remained as an NPA for more than 12 months.