Question

On the secured portion of the doubtful assets for the period of 1 to 3 years to be charged a provision of

• A. 100%
• B. 60%
• C. 50%
• D. 40%

Answer 1

Answer:

D. 40%

• Assets remaining as NPA for over 12 months are classified as doubtful assets.

• The credit risk of such assets is much higher than that of substandard assets. Their recovery prospects are also very slim. Loss assets. Assets with very little recovery value or no recovery prospects are deemed to be loss assets.