Question
Regarding Non-Performing Assets (NPAs), evaluate these
statements: 1. An account is classified as Doubtful if it has remained in the sub-standard category for 12 months. 2. Provisioning for a Doubtful asset (D1 category - secured portion) is 25%. 3. Banks must provide 100% for the unsecured portion of a Doubtful asset. Which of the statements above is/are correct?ΒSolution
All statements are correct. For Doubtful assets, the provisioning on the secured portion is 25% (up to 1 year - D1), 40% (1-3 years - D2), and 100% (above 3 years - D3). Unsecured portions always require 100% provisioning.
In the following question, select the related letters from the given alternatives.
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