Credit control and Credit Monitoring Part 1 Ques
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What is the primary objective of credit monitoring in a bank?
Credit monitoring aims to ensure that loan accounts perform as expected post-disbursement, detecting early warning signals of stress to prevent deterioration into NPAs.
What is the meaning of 'sub-standard asset' in RBI's asset classification?
NPA remaining so for up to 12 months.
What is meant by 'end-use verification' in credit control?
End-use verification confirms that loan funds have been utilized for the specific purpose sanctioned, preventing diversion of credit to unintended activities.
What is a 'doubtful asset' under RBI's prudential norms?
Sub-standard asset remaining so beyond 12 months.
What are Early Warning Signals (EWS) in the context of credit monitoring?
EWS are indicators such as frequent overdrawals, return of cheques, sudden drop in turnover, or delay in submission of stock statements that signal potential stress in a borrower's account.
What is a 'loss asset' in the context of NPA classification?
Asset where loss is identified but not fully written off.
What is a 'Special Mention Account' (SMA) under RBI guidelines?
SMA is a classification for loan accounts showing incipient stress before they become NPAs; SMA-0 has overdue up to 30 days, SMA-1 up to 60 days, and SMA-2 up to 90 days.
What is SMA-0 classification under RBI's CRILC reporting norms?
Principal or interest overdue between 1 to 30 days.
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