Question

When an asset is upgraded from an NPA status back to a Standard Asset, what is the regulatory requirement regarding the restoration of its classification?

Q: Answer-When an asset is upgraded from an NPA status back to a Standard Asset, what is the regulatory requir...

If arrears of interest and principal are paid in full by the borrower, the account can be upgraded to a Standard asset immediately, subject to compliance with specific restructuring guidelines if applicable.

A It can be upgraded immediately once all outstanding interest and principal arrears are fully paid by the borrower.

B It can be upgraded only after showing satisfactory performance for a continuous period of one year from the date of partial payment.

C It cannot be upgraded and must remain in substandard for at least 12 months.

D It can be upgraded immediately upon the restructuring of the loan documents, regardless of payments.

E It can be upgraded only if approved by the Board of Directors during the annual audit.

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When an asset is upgraded from an NPA status back to a Standard Asset, what is the regulatory requirement regarding the restoration of its classification?

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