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    Question

    A borrower shows continuous losses, erosion of net worth

    by 60%, irregular operations in CC account, and diversion of funds to group companies. This exposure should ideally be treated as:
    A Standard Asset with monitoring Correct Answer Incorrect Answer
    B SMA-1 Correct Answer Incorrect Answer
    C Sub-standard Correct Answer Incorrect Answer
    D Doubtful – I Correct Answer Incorrect Answer
    E Wilful Default Account Correct Answer Incorrect Answer

    Solution

    Diversion + erosion of net worth + deliberate non-repayment = Wilful Default.

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