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    Question

    Regarding the secured portion, what is the provisioning

    requirement for an advance that has remained in the 'doubtful' category for one to three years?
    A 10% Correct Answer Incorrect Answer
    B 25% Correct Answer Incorrect Answer
    C 40% Correct Answer Incorrect Answer
    D 75% Correct Answer Incorrect Answer
    E 100% Correct Answer Incorrect Answer

    Solution

    When an advance has remained in the 'doubtful' category for a period of one to three years, the provisioning requirement for the secured portion is 40%. This means that the bank is required to set aside an amount equivalent to 40% of the secured portion of the doubtful asset as a provision. This provisioning reflects the increased risk and uncertainty associated with such assets and helps banks mitigate potential losses.

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