A Non-Performing Asset (NPA) is defined by the Reserve Bank of India (RBI) as a loan or advance for which the interest and/or instalment of principal remains overdue for a specified period. Statement 1 is correct; for a term loan, if interest and/or principal is overdue for more than 90 days, it is classified as an NPA. Statement 2 is correct; for agricultural advances, specific criteria apply based on crop seasons. For short- duration crops (those with a crop season of up to one year), if the instalment of principal or interest remains overdue for two crop seasons, the loan is classified as NPA. Statement 3 is correct; in the case of bills purchased and discounted by banks, if the bill remains overdue for a period of more than 90 days, it becomes an NPA.
Consider the following statements regarding the Non-Performing Asset : It is a loan or an advance where interest and/or instalment of principal remain overdue for a period of more than 90 days in respect of a Term Loan. the instalment of principal or interest thereon remains overdue for two crop seasons for short duration crops. the bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted. Which of the above statements is/are correct ?
Asked in PPSC CS Prelims 2013 · Topic: Money & Banking (Banking Sector Reforms: Basel Norms, Asset Quality Review (AQR), and NPA Management)
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