BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Any of the borrowal account of the enterprise remains NPA for ten months or more
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Any of the borrowal account of the enterprise remains NPA for eight months or more
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Any of the borrowal account of the enterprise remains NPA for five months or more
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Any of the borrowal account of the enterprise remains NPA for three months or more
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Detailed explanation-1: -What is the definition of a sick unit? As per the extant guidelines, a Micro or Small Enterprise (as defined in the MSMED Act 2006) may be said to have become Sick, if· Any of the borrower account of the enterprise remains NPA for three months or more.
Detailed explanation-2: -MSME Definition The classification of Micro, Small and Medium Enterprises is defined under the MSMED Act 2006 amendment dated 01/06/2020. The Micro, Small and Medium Enterprises is based on the Investment in Plant, Machinery or Equipment values (excluding land and building) and Annual Turnover.
Detailed explanation-3: -The sick industrial companies (special provision) Act 1985 identifies sickness in terms of cash losses for two consecutive financial years and accumulated losses equaling or exceeding the net worth of the company at the end of the second financial year.
Detailed explanation-4: -3.2. 3 In terms of the recommendations of the Prime Minister’s Task Force on MSMEs, banks are advised to achieve a 20 per cent year-on-year growth in credit to micro and small enterprises and a 10 per cent annual growth in the number of micro enterprise accounts.