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    Question

    A term loan of ₹70 crore is classified as Doubtful.

    Realisable value of primary security is ₹40 crore and collateral security is ₹10 crore. The balance exposure is unsecured. What is the minimum provisioning implication?
    A 25% on entire amount Correct Answer Incorrect Answer
    B 40% on entire amount Correct Answer Incorrect Answer
    C 100% on unsecured portion only Correct Answer Incorrect Answer
    D 100% on secured portion only Correct Answer Incorrect Answer
    E No provision required Correct Answer Incorrect Answer

    Solution

    For doubtful assets, unsecured portion = 100% provision.

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