Question

Under banking regulations, an account's status is defined as "Out of Order" when it satisfies which of the following conditions?

Q: Answer-Under banking regulations, an account's status is defined as 'Out of Order' when it satisfies which...

The regulatory definition for Out of Order status applies typically to overdraft or cash credit accounts where the balance exceeds limits or credit items are missing or insufficient over a 90-day window. Option A defines the unrenewed facility trigger. Option B defines the derivative transaction trigger.

A When regular or ad hoc credit limits are not reviewed or renewed within 180 days from the due date.

B When a derivative transaction receivable stays unpaid for more than 90 days from the due date.

C When the outstanding balance remains continuously in excess of the sanctioned limit/drawing power, or there are no credits for 90 days, or credits do not cover the interest debited.

D When principal installments for long-duration agricultural crops stay unpaid for two consecutive seasons.

E When a liquidity facility under a securitisation agreement stays outstanding for more than 180 days.

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