Asset classification and provisioning norms
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What is the meaning of NPA in the context of asset classification?
A Non-Performing Asset (NPA) is a loan or advance where interest or principal has remained overdue for more than 90 days in a term loan, or the account remains out of order for 90 days in case of cash credit/overdraft.
What is the classification period for a Sub-Standard Asset before it becomes Doubtful?
12 months of remaining sub-standard
What is the 90-day norm for NPA classification introduced by RBI?
RBI introduced the 90-day overdue norm for NPA classification from March 31, 2004, replacing the earlier 180-day norm, aligning Indian banks with international best practices.
What is the provisioning rate for secured portion of Doubtful Assets in D3 category?
100 percent provision required
How are agricultural advances classified as NPA?
In agricultural advances, a loan is classified as NPA if interest or principal remains overdue for two crop seasons for short-duration crops or one crop season for long-duration crops.
What is the provisioning rate for the unsecured portion of Sub-Standard Assets?
25 percent of outstanding balance
What are the four categories of asset classification under RBI norms?
RBI classifies bank assets into four categories: Standard Assets, Sub-Standard Assets, Doubtful Assets, and Loss Assets.
What is the minimum period an account must remain in NPA before being classified as Doubtful?
12 months as sub-standard asset
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