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    Question

    For unsecured doubtful advances outstanding for more

    than three years, the required provisioning percentage is:
    A 10% Correct Answer Incorrect Answer
    B 40% Correct Answer Incorrect Answer
    C 100% Correct Answer Incorrect Answer
    D 25% Correct Answer Incorrect Answer
    E 30% Correct Answer Incorrect Answer

    Solution

    As per RBI guidelines on asset classification and provisioning norms: • Advances are classified into sub-standard, doubtful, and loss assets based on their period of default and recovery prospects. • For doubtful assets, provisioning depends on whether the advance is secured or unsecured, and the time periodfor which it has remained doubtful. • Specifically, for unsecured doubtful advances that have remained doubtful for more than 3 years, banks must create a 100% provision. • This ensures that banks maintain adequate buffers against the high probability of loss in such cases. Thus, the provisioning requirement is 100% for unsecured doubtful advances exceeding three years.

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