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      Question

      For NPAs with an outstanding balance of ₹5 crore and

      above, which of the following measures has been made mandatory to improve stock valuation reliability and reduce divergence in security assessment?
      A Stock audit by external agencies every three years Correct Answer Incorrect Answer
      B Stock audit by external agencies every five years Correct Answer Incorrect Answer
      C Stock audit by external agencies every year Correct Answer Incorrect Answer
      D Valuation of collaterals every three years Correct Answer Incorrect Answer
      E Valuation of collaterals every year Correct Answer Incorrect Answer

      Solution

      • To ensure accuracy in security assessment and avoid discrepancies in stock valuation, RBI mandates that all NPAs with a balance of ₹5 crore and above must undergo a stock audit annually by external agencies approved as per the Board’s guidelines. • In addition, collateral valuation (such as immovable properties charged to the bank) must be carried out once every three years by certified valuers. • These measures help maintain transparency, improve reliability of reported asset values, and strengthen risk management practices for banks.

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