BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The loan portfolio of banks is classified according to the amount of each loan
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Irregular loan accounts are assisted to regularize with modification in terms and conditions of the loan sanction
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Asset classification into performing and non performing accounts
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Substandard loan accounts are given further loans
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Detailed explanation-1: -The debt restructuring process typically involves getting lenders to agree to reduce the interest rates on loans, extend the dates when the company’s liabilities are due to be paid, or both. These steps improve the company’s chances of paying back its obligations and staying in business.
Detailed explanation-2: -Objective The objective of the Corporate Debt Restructuring (CDR) framework is to ensure timely and transparent mechanism for restructuring of the corporate debts of viable entities facing problems, outside the purview of BIFR, DRT and other legal proceedings, for the benefit of all concerned.
Detailed explanation-3: -Corporate Debt Restructuring (“CDR”) is typically a voluntary framework, under which financial institutions and banks restructure the debt of companies facing financial difficulties due to various factors, in order to provide support at the right time for such businesses.
Detailed explanation-4: -You may be required to provide additional guarantees or collateral or undertakings to prove that you can repay the loans under the restructured terms and conditions. The restructuring can be done by any of the following: payment rescheduling, moratorium, modifying terms of advances, etc.