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    Question

    While auditing a bank’s loan portfolio, the auditor

    notices multiple loan accounts overdue for 91+ days. What should be the classification of such accounts as per IRAC norms?
    A Standard Correct Answer Incorrect Answer
    B Substandard Correct Answer Incorrect Answer
    C Doubtful Correct Answer Incorrect Answer
    D Loss Correct Answer Incorrect Answer
    E Performing Correct Answer Incorrect Answer

    Solution

    As per IRAC norms, a loan overdue for more than 90 days becomes a Non-Performing Asset (NPA) and is initially classified as Substandard.

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