GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Bad debts
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Overdrawn accounts
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Out of order accounts
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Non-performing Assets
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Detailed explanation-1: -The correct answer is Non Performing Asset. A loan is classified as a non-performing asset when it is not being repaid by the borrower. It results in the asset no longer generating income for the lender or bank because the interest is not being paid by the borrower. In such a case, the loan is considered “in arrears.”
Detailed explanation-2: -Non-performing assets can include loans, bonds, and other financial instruments, such as mortgages, commercial loans, and credit card debt. The term is most commonly used in the banking and finance industries but can also refer to other investments, such as real estate.
Detailed explanation-3: -In respect of advances granted for agricultural purpose where interest and/or instalment of principal remains unpaid after it has become past due for two harvest seasons but for a period not exceeding two half-years, such an advance should be treated as NPA.
Detailed explanation-4: -Cash credit. Bank overdraft. Loan. Discounting of bill of exchange. Investment of funds. credit creation.