BANKING GENERAL KNOWLEDGE
Question
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Detailed explanation-1: -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.
Detailed explanation-2: -Doubtful assets: An asset would be classified as doubtful if it has remained in the substandard category for a period of 12 months.
Detailed explanation-3: -Categories of NPAs Doubtful Asset: Any loan or advance is a doubtful asset if it remains outstanding or NPA for a period of more than 12 months and is already classified as a sub-standard asset.
Detailed explanation-4: -4.1.2 Doubtful Assets A doubtful asset was one, which remained NPA for a period exceeding two years. With effect from 31 March 2001, an asset is to be classified as doubtful, if it has remained NPA for a period exceeding 18 months.