True or false about NPA rules

Exercise and reference answers

Questions

1. Statement is true

   Yes

   Statement

   A term loan turns NPA after 90 days overdue.

2. Statement is true

   No

   Statement

   A short duration crop loan gets one season.

3. Statement is true

   No

   Statement

   Part payment is enough to upgrade an NPA.

4. Statement is true

   Yes

   Statement

   Loss assets on the books need full provision.

5. Statement is true

   No

   Statement

   Standard asset provisions reduce net NPAs.

6. Statement is true

   Yes

   Statement

   Collateral property is revalued once in three years.

Instructions

Decide whether each statement is true or false.

Explanation