32 - Lending Risks and Non-performing Assets

Banking Awareness Multiple Choice Questions (MCQs) and Answers with explanation on Lending Risks and Non-performing Assets for IBPS Bank PO, IBPS Bank Clerical, RRB PO and Clerical, SBI PO and SBI Clerical, IBPS Recruitments, RBI Grade B and RBI Bank

1. What is the time period for a term loan to be classified as NPA?

[A] 30 days
[B] 60 days
[C] 90 days
[D] 365 days

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2. After how many crop seasons, an unpaid short duration Farm loan will be termed as NPA?

[A] 1 crop season
[B] 2 crops seasons
[C] 2 years
[D] 4 crop seasons

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3. What is the time period for the long duration crops to be termed as NPA?

[A] 90 days
[B] 1 crop season
[C] 2 crop seasons
[D] 180 days

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4. What are the funds that are set aside by the banks as fraction to the loans known as?

[A] NPA Coverage Ratio
[B] Loan Default Ratio
[C] Provisioning Coverage Ratio
[D] Credit Exposure Ratio

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5. What do we call a loan which remains NPA for a period less than or equal to 12 months?

[A] Doubtful asset
[B] Sub-standard Asset
[C] Loss
[D] None of the above

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6. What is a Doubtful Asset?

[A] sub-standard asset for a period of 12 months
[B] sub-standard asset for a period of 3 months
[C] sub-standard asset for a period of 6 months
[D] None of the above

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7. When was the SARFAESI Act enacted?

[A] 2004
[B] 2006
[C] 1999
[D] 2002

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8. What is the primary aim of enacting the SARFAESI Act?

[A] Recovering Loans
[B] Increasing Deposits
[C] Transparent appointment of Directors
[D] Reducing Corruptions and Scams

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9. Where is the SARFAESI Act not applicable?

[A] On unsecured loans
[B] Loans below 100000
[C] where remaining debt is below 20% of the original principal
[D] All of the above

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10. What is termed as Loss Asset?

[A] sub-standard asset for more than 3 years
[B] sub-standard asset for more than 2 years
[C] sub-standard asset for more than 1 years
[D] None of the above

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