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Question

Doubtful Debts are NPAs in the doubtful debts category have been past due for at least ___________.

A 6 months Correct Answer Incorrect Answer
B 9 months Correct Answer Incorrect Answer
C 10 months Correct Answer Incorrect Answer
D 12 months Correct Answer Incorrect Answer
E 18 months Correct Answer Incorrect Answer

Solution

Non-performing assets in the doubtful debts category have been past due for at least 18 months. Banks generally have serious doubts that the borrower will ever repay the full loan. This class of NPA seriously affects the bank’s own risk profile.

Loss Assets

These are non-performing assets with an extended period of non-payment. With this class, banks are forced to accept that the loan will never be repaid, and must record a loss on their balance sheet. The entire amount of the loan must be written off completely.

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