<<123456789101112131415161718192021222324252627282930>> 1. When will a loan granted for short duration crops be treated as non-performing asset (NPA)?If the instalment of principal or interest remains overdue for one crop seasonIf the instalment of principal or interest remains overdue for two crop seasonsIf the borrower fails to repay within 90 days of the due dateIf the loan is not repaid within six months from the date of disbursementQuestion 1 of 30 2. How long does an instalment of principal or interest need to remain overdue for a loan granted for long duration crops to be treated as NPA?One crop seasonThree monthsTwo crop seasonsSix monthsQuestion 2 of 30 3. Who determines the crop season for each crop in the context of agricultural advances?Ministry of AgricultureReserve Bank of IndiaState Level Bankers' Committee (SLBC)Agricultural Development BoardQuestion 3 of 30 4. When can credit facilities backed by guarantee of the Central Government be treated as NPA?When the borrower fails to repay within 90 days of the due dateWhen the Government repudiates its guarantee when invokedWhen the loan remains overdue for one crop seasonWhen the State Level Bankers' Committee declares it as NPAQuestion 4 of 30 5. Are State Government guaranteed advances exempt from being classified as NPA?Yes, they are exempt regardless of overdue payments.No, they are not exempt and will be classified as NPA if payments are overdue for more than 90 days.Yes, they are exempt only if the State Government repudiates its guarantee.No, they are not exempt and will be classified as NPA if payments are overdue for more than six months.Question 5 of 30 6. What is the provision requirement for loss assets according to the provisioning norms?0%15%50%100%Question 6 of 30 7. How is the provision requirement for doubtful assets calculated for the secured portion based on the period for which the asset has remained doubtful?10% for up to one year, 25% for one to three years, and 100% for more than three years25% for up to one year, 40% for one to three years, and 100% for more than three years15% for up to one year, 40% for one to three years, and 100% for more than three years20% for up to one year, 50% for one to three years, and 100% for more than three yearsQuestion 7 of 30 8. What is the provision requirement for substandard assets according to the general provision norm?5%10%15%20%Question 8 of 30 9. Under what circumstances will substandard infrastructure loan accounts attract a provisioning of 20% instead of 25%?When escrow accounts are not availableWhen there is no clear and legal first claim on cash flowsWhen the bank does not have appropriate mechanism to escrow the cash flowsWhen the bank has safeguards such as escrow accounts and a clear and legal first claim on cash flowsQuestion 9 of 30 10. How is unsecured exposure defined in the context of provisioning norms?Exposure without any security providedExposure with security valued at less than 10% of the outstanding exposureExposure with intangible securityExposure without any exposure limitsQuestion 10 of 30 11. What is the standard asset provisioning rate for advances to the Commercial Real Estate (CRE) sector?0.25%0.75%1.00%2.00%Question 11 of 30 12. Which category of loans attracts a standard asset provisioning rate of 0.40%?Farm Credit to agricultural activitiesCommercial Real Estate - Residential Housing SectorHousing loans extended at teaser ratesAll other loans not specified elsewhereQuestion 12 of 30 13. What is the standard asset provisioning rate for housing loans extended at teaser rates, and when does it revert to 0.40%?0.25%; reverts after 1 year0.75%; reverts after 6 months2.00%; reverts after 1 year1.00%; reverts after 6 monthsQuestion 13 of 30 14. How are provisions on standard assets treated in the balance sheet?They are netted from gross advances.They are shown separately as 'Provisions against Standard Assets.'They are included in the net NPAs.They are shown under 'Contingent Provisions against Standard Assets.'Question 14 of 30 15. What is the standard asset provisioning rate for Medium Enterprises?0.25%0.40%0.75%1.00%Question 15 of 30 16. What does Provisioning Coverage Ratio (PCR) measure?The ratio of gross non-performing assets to total assetsThe extent of funds a bank has kept aside to cover loan lossesThe ratio of net profit to total assetsThe ratio of capital reserves to total liabilitiesQuestion 16 of 30 17. Why is it important for banks to build up provisioning and capital buffers?To maximize profits during downturnsTo reduce operational costsTo enhance the soundness of individual banks and the stability of the financial sectorTo comply with regulatory requirementsQuestion 17 of 30 18. What was the target Provisioning Coverage Ratio (PCR) set by RBI for banks by the end of September 2010?50%60%70%80%Question 18 of 30 19. How should the surplus of the provision under PCR be handled by banks?Invested in high-risk assetsUsed for executive bonusesSegregated into a countercyclical provisioning bufferReturned to shareholders as dividendsQuestion 19 of 30 20. How should the PCR of the bank be disclosed according to the guidelines?In the Balance SheetIn the Profit and Loss StatementIn the Cash Flow StatementIn the Notes to Accounts to the Balance SheetQuestion 20 of 30 21. What is the purpose of the Central Repository of Information on Large Credits (CRILC) established by RBI?To provide loans to large businessesTo store information on large credit transactionsTo monitor agricultural loansTo manage interbank exposuresQuestion 21 of 30 22. What is the threshold for reporting credit information to CRILC for fund-based and non-fund based exposure?Rs. 10 millionRs. 50 millionRs. 100 millionRs. 500 millionQuestion 22 of 30 23. Which category of loans is exempted from reporting to CRILC?Industrial loansCrop loansRetail loansExport loansQuestion 23 of 30 24. What is the purpose of identifying incipient stress in loan accounts before they turn into NPAs?To waive off the loanTo escalate the loan to a higher categoryTo initiate recovery measures and prevent the loan from becoming an NPATo report the loan to CRILCQuestion 24 of 30 25. What is the basis for classifying a loan account as SMA-1?Principal or interest payment not overdue for more than 30 daysPrincipal or interest payment overdue between 31 - 60 daysPrincipal or interest payment overdue between 61 - 90 daysPrincipal or interest payment overdue for more than 90 daysQuestion 25 of 30 26. What is the primary purpose of a bad bank?To generate profits for the governmentTo ease the burden on banks by taking bad loans off their balance sheetsTo compete with commercial banks in lending activitiesTo invest in distressed assets for long-term gainsQuestion 26 of 30 27. What is the name of the bad bank mentioned in the text?India Debt Resolution Company Ltd (IDRCL)National Asset Reconstruction Company Limited (NARCL)Reserve Bank of India (RBI)Securities and Exchange Board of India (SEBI)Question 27 of 30 28. How does a bad bank make a profit?A bad bank makes a profit in its operations if it manages to sell the loan at a price higher than what it paid to acquire the loan from a commercial bank.By selling non-performing assets to investorsBy charging a fee for its servicesBy receiving government subsidiesQuestion 28 of 30 29. What role does India Debt Resolution Company Ltd (IDRCL) play in the bad bank structure?It provides financial guarantees to commercial banksIt purchases bad loans from commercial banksIt helps to sell the stressed assets acquired by the bad bankIt invests in distressed assets for long-term gainsQuestion 29 of 30 30. What happens if the bad bank is unable to sell a bad loan or sells it at a loss?The government guarantees the repayment to commercial banksThe commercial banks absorb the lossThe bad bank declares bankruptcyThe investors bear the lossQuestion 30 of 30 Loading...
