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A bank may spread the provision for a detected fraud over up to:
AFour quarters
BFive quarters
CSeven quarters
DEight quarters
Answer & Solution
Correct answer: A. Four quarters
1. The whole amount is normally provided at once.
2. Spreading it smooths the hit to quarterly profit.
3. The spread may run to four quarters.
_Source: RBI Master Circular, Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances_
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