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    Question

    A term loan installment and interest both remain overdue

    for more than 90 days. However, interest has been serviced once during this period but principal remains overdue. The asset should be classified as:
    A Standard Asset Correct Answer Incorrect Answer
    B SMA-2 Correct Answer Incorrect Answer
    C Sub-standard Asset Correct Answer Incorrect Answer
    D Doubtful Asset Correct Answer Incorrect Answer
    E Loss Asset Correct Answer Incorrect Answer

    Solution

    If any one of principal or interest remains overdue > 90 days, asset becomes NPA → Sub-standard.

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