56. Consider the following Statement with reference to financial Institution in India
1. Banks whose Net NPA level is 5% & above are required to take prior permission from RBI to declare dividend.
2. Under Strategic Debt Restructuring (SDR) scheme Bank can convert loans given to stressed firms into equity.
3. In Stressed asset fund, investors pool their money and buy bad loans from banks.
Which of the above statement(s) is/are correct?

Only 1

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Only 2

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Only 1 and 3

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All of the above

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Solution

The correct option is D All of the above
Banks whose Net NPA level is 5% & above are required to take prior permission from RBI to declare dividend. Under Strategic Debt Restructuring (SDR) scheme Bank can convert loans into equity, acquire a majority stake in the firm, replace existing the promoters or management with new one. Stressed asset fund invites investors to pool their money together and buy bad loans from banks. Fund asks the lender to hand over the loans at a discount.

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Correct answer code is

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