BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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sub-standard asset for more than 3 years
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sub-standard asset for more than 2 years
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sub-standard asset for more than 1 years
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None of the above
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Detailed explanation-1: -A substandard asset is an asset classified as an NPA for less than 12 months. A doubtful asset is an asset that has been nonperforming for more than 12 months. Loss assets are loans with losses identified by the bank, auditor, or inspector that need to be fully written off.
Detailed explanation-2: -When the amount has not been written off wholly but loss has been identified by the RBI, or external auditor, or internally by the bank, then this asset is classified as a loss asset.
Detailed explanation-3: -(iii) Sub-standard Assets. A general provision of 10 per cent on total outstanding should be made without making any allowance for ECGC guarantee cover and securities available. (iv) Provision on Standard Assets. (a) Tier-I banks should make a general provision of a minimum of 0.25 per cent on standard assets.
Detailed explanation-4: -4.1.3 Loss Assets A loss asset is one where loss has been identified by the bank or internal or external auditors or the RBI inspection but the amount has not been written off wholly.
Detailed explanation-5: -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.