BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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90 days in interest and/or installment in term of loan.
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90 days out of order in case of over draft/cash credit. Bills purchased and Bills discounted.
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2 harvest seasons for advances for cultivation of short duration crops.
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All of the above
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Detailed explanation-1: -What is Non Performing Assets. Definition: A non performing asset (NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days. Description: Banks are required to classify NPAs further into Substandard, Doubtful and Loss assets.
Detailed explanation-2: -A doubtful asset is an asset that has been nonperforming for more than 12 months.
Detailed explanation-3: -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-4: -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-5: -An asset becomes non-performing when it ceases to generate income for the bank & or becomes non-productive assets & it can be broadly classified as given below. Term Loan Account is treated Interest and/ or instalment remains over due for a period of more than 90 days.