Q1 What are the ways in which NPA is recovered?
(a)Selling of loan on discount to collection agency
(b)Convert bad loans into equity.
(c)Possession/ sale of collateral.
(d)Restructure loans to maintain cash flow.
(e)All of the above
Q2 A term loan is said to be non performing when interest and/ or installment of principal remain overdue for a period of more than _______.
Q3 Which is not a category of Non-performing assets (NPA)?
(e)All of the above
Q4 NPA implemented under the recommendation of which committee______________.
(c)K P committee
(d)All of these
(e)None of these
Q5 When RBI started implementation of NPA guidelines?
Q6 Which of the following is the impact of NPA?
(a)It makes the bank competitive
(b)It can cause higher inflation and lower growth rate
(c)It can lead to bankruptcy
(d)A, B & C
(e)A & B
Q7 What does M stands for in SMA with respect to NPA?
(e)None of these
Q8 What is the definition of the Non-Performing Asset?
(a)Loan or advance
(b)Principal or interest payment
(c)Both A and B
(d)Asset become old and unusable
(e)None of The Above
Q9 NPA in banking terminology denotes?
(a)Net Profitable Assets
(b)New Para-banking Assets
(c)New Pension Act
(d)Net Performing Assets
Q10 Non-performing loans are also known as-
Q11 Expand the term SARFAESI Act-
(a)Securitisation and Reconstruction of Financial Assets and Enactment of Security Interest
(b)Securitisation and Reconstruction of Financial Assets and Enforcement of Social Interest
(c)Securitisation and Regeneration of Financial Assets and Enforcement of Security Interest
(d)Securitisation and Reconstruction of Ferry Assets and Enforcement of Security Interest
(e)Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest
Q12 Expand the term ARC-
(a)Asset Rendering Company
(b)Asset Recovery Corporation
(c)Asset Reconstruction Corporation
(d)Asset Reconstruction Company
(e)Asset Recovery Company
Q13 When was DRT’s introduced for the first time in India?
Q14 Which of the following statement is not true wrt wilful defaulter-
(a)With whom funds are not available in the form of assets as funds have been siphoned off
(b)Financially capable to repay and yet does not do so
(c)Who has sold or disposed the property that was used as a security to obtain the loan
(d)One who diverts the funds for purposes other than the fund was availed for
(e)All are true
Q15 In which year SARFAESI Act came into existence?
Sol. NPA can be recovered by sale of collateral, loan restructuring to maintain cash flows, converting bad loans into equity, and selling loans on discount to collection agency.
Sol. An account as NPA only if the interest due and charged during any quarter is not serviced fully within 90 days from the end of the quarter.
Sol. The standard asset for a bank is an asset that is not classified as an NPA.
Sol. NPA implemented under the recommendation of Narsimha committee.
Sol. RBI started implementation of NPA guidelines 1992.
Sol. NPA will hurt the overall demand in the Indian economy which will lead to lower growth rates and higher inflation because of the higher cost of capital.
Sol. SMA- Special Mention Accounts. Banks will categories accounts as SMA when the money remains outstanding for 30-90 days after due payment date.
Sol. 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.
Sol. A Non-Performing Asset (NPA) is defined as a credit policy in respect of which the interest and instalment of principal has remained “past due” for a specified period of time.
Sol. Non-performing loans are also called “bad debt”.
Sol. Expand the term SARFAESI Act-Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest.
Sol. Expand the term ARC-Asset Reconstruction Corporation.
Sol. Debts Recovery Tribunals (DRT’s) introduced for the first time in India 1994.
Sol. Wrt wilful defaulter-
1With whom funds are not available in the form of assets as funds have been siphoned off
Financially capable to repay and yet does not do so
Who has sold or disposed the property that was used as a security to obtain the loan
One who diverts the funds for purposes other than the fund was availed for
Sol. SARFAESI Act came into existence 2002.
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