Banking Sample Paper SBI Clerk Grade (Main) Sample Test Paper-4

A Non-Performing Asset in Banking Business means

A. A fixed asset of bank is not been utilised

B. A portion of deposits not been utilised

C. A loan asset on which interest and/or installments remain unchanged

A) Only B

B) Only C

C) Only A

D) Only B and C

E) Only A and C

Correct Answer: B

Solution :

As per the RBI Circular on Asset Classification, released in July 2014, a Non Performing Asset (NPA) is a loan or an advance where;

(i) interest and / or instalment of principal remain overdue for a period of more than 90 days in respect of a term loan,

(ii) the account remains 'out of order' in respect of an Overdraft/ Cash Credit (OD/CC).

(iii) the bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted, etc.