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    Question

    How is a non-performing asset (NPA) defined in the

    context of agricultural loans specifically for long duration crops?
    A The instalment of principal or interest remains overdue for two consecutive crop seasons. Correct Answer Incorrect Answer
    B The instalment of principal or interest remains overdue for one crop season for short duration crops. Correct Answer Incorrect Answer
    C The instalment of principal or interest remains overdue for three consecutive crop seasons. Correct Answer Incorrect Answer
    D The instalment of principal or interest remains overdue for one crop season for long duration crops. Correct Answer Incorrect Answer
    E The instalment of principal or interest remains overdue for one year. Correct Answer Incorrect Answer

    Solution

    In the case of agricultural loans for long duration crops, a non-performing asset (NPA) is classified when the instalment of principal or interest remains overdue for one crop season. This means that if the borrower fails to make the required payments for one crop season specifically for long duration crops, the loan will be categorized as an NPA. It is crucial for lenders to closely monitor and manage NPAs to mitigate potential risks and maintain a healthy loan portfolio.

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