Q. Match the following:
List A | List B |
1. Substandard assets | a) Default Capital Assets for more than 12 months. |
2. Doubtful assets | b) Default Capital Assets for less than/equal to 12 months. |
3. Loss assets | c) Uncollectible capital assets |
Explanation:
Sub-standard assets: An asset would be classified as substandard if it remained NPA for a period less than or equal to 12 months. In such cases, the current net worth of the borrowers/ guarantors or the current market value of the security charged is not enough to ensure recovery of the dues to the banks in full.
Doubtful assets: An asset is required to be classified as doubtful if it has remained NPA for more than 12 months. For Tier-I banks, the 12-month period of classification of a substandard asset in the doubtful category is effective from April 1, 2009.
Loss assets: A loss asset is one where loss has been identified by the bank or internal or external auditors or by the Co-operation Department or by the Reserve Bank of India inspection but the amount has not been written off, wholly or partly.