📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    A stressed account with outstanding ₹100 crore is

    proposed for restructuring. Bank sacrifice in NPV terms is ₹18 crore. Promoter offers additional equity of only ₹5 crore and no personal guarantee. What should be the bank’s primary stance?
    A Approve restructuring to avoid NPA Correct Answer Incorrect Answer
    B Approve with higher interest Correct Answer Incorrect Answer
    C Reject restructuring due to inadequate promoter sacrifice Correct Answer Incorrect Answer
    D Convert full debt into equity Correct Answer Incorrect Answer
    E Defer decision for one year Correct Answer Incorrect Answer

    Solution

    Restructuring requires meaningful promoter sacrifice, not token contribution.

    Practice Next
    More Basic Accounting Concepts Questions

    Relevant for Exams:

    ask-question