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    Question

    As per RBI's IRAC norms, a term loan becomes a

    Non-Performing Asset (NPA) if interest and/or instalment of principal remains overdue for a period of more than:
    A 30 days Correct Answer Incorrect Answer
    B 60 days Correct Answer Incorrect Answer
    C 90 days Correct Answer Incorrect Answer
    D 180 days Correct Answer Incorrect Answer
    E 365 days Correct Answer Incorrect Answer

    Solution

    An asset becomes non-performing when it ceases to generate income for the bank. Specifically, a term loan is treated as an NPA if interest/principal remains overdue for more than 90 days.

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