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      Question

      What is the main criterion for classifying a loan as a

      Non-Performing Asset (NPA)?
      A Default in interest payment for 90 days Correct Answer Incorrect Answer
      B Default in principal payment for 90 days Correct Answer Incorrect Answer
      C Default in both interest and principal payment for 90 days Correct Answer Incorrect Answer
      D Default in interest or principal payment for 90 days Correct Answer Incorrect Answer
      E Default in both interest and principal payment for 180 days Correct Answer Incorrect Answer

      Solution

      The loan becomes a non-performing asset when payments are overdue for 90 days. A loan is classified as an NPA if the principal or interest payment or both have remained overdue for a continuous period of more than 90 days

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