Question

Q39) Identify the incorrect statement/s regarding NPA(non-performing assets)

• A. a) NPA are those accounts of the borrowers who have defaulted for more than 90 days. (commercial loans)
• B. b) The accounts which have remained NPA for more than a year are called substandard assets
• C. c) Public sector banks have larger share of NPA than private banks
• D. d) SARFAESI act of 2003 was passed to reduce the problem of NPA

Answer 1

The correct option is B

b) The accounts which have remained NPA for more than a year are called substandard assets

Ans: B

Explanation: The accounts which have remained NPA for up to a year are called substandard assetsThe accounts which have remained NPA for more than a year are called DOUBT FULL assets.

Public sector banks have 80% of the overall NPA.

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (also known as the Sarfaesi Act) is an Indian law.It allows banks and other financial institution to auction residential or commercial properties to recover loans.