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A Central Government guaranteed advance turns NPA only when the:

AGuarantee is renegotiated
BGuarantee is reassigned
CGuarantee is repudiated
DGuarantee is registered
Answer & Solution
Correct answer: C. Guarantee is repudiated
1. Such an advance may be overdue and still not be an NPA. 2. The exemption does not extend to income recognition. 3. It turns NPA when the Government repudiates the guarantee. _Source: RBI Master Circular, Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances_
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