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Under asset classification of NPA accounts above one year but upto three year assets due known as
  • a)
    substandard asset
  • b)
    standard assets
  • c)
    doubtful asset
  • d)
    bad debts
  • e)
    loss assets
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Under asset classification of NPA accounts above one year but upto thr...
Under the asset classification norms for Non-Performing Assets (NPA) in India, accounts that remain overdue for a period of more than one year but up to three years are categorized as doubtful assets.
Doubtful assets are those where the possibility of recovery is uncertain, and there are significant doubts about the borrower's ability to repay the loan. These assets have a higher degree of risk compared to substandard assets, as the potential for loss is more pronounced.
It is important for banks and financial institutions to classify assets appropriately based on their repayment status and assess the probability of recovery. By classifying assets as doubtful, banks can reflect the increased risk in their financial statements and take appropriate measures for provisioning and risk management.
Therefore, the correct answer is C) doubtful asset.
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Under asset classification of NPA accounts above one year but upto three year assets due known asa)substandard assetb)standard assetsc)doubtful assetd)bad debtse)loss assetsCorrect answer is option 'C'. Can you explain this answer?
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