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A substandard infrastructure loan attracts a provision of:
A20 per cent
B30 per cent
C40 per cent
D50 per cent
Answer & Solution
Correct answer: A. 20 per cent
1. Escrow of cash flows is a safeguard in such lending.
2. That earns a lower provision than the usual 25 per cent.
3. The rate falls to 20 per cent.
_Source: RBI Master Circular, Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances_
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