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    Question

    To enhance reliability on stock valuation and minimize divergence arising from differences in assessment of security value, which of the following measures is mandatory for NPAs with a balance of ₹5 crore and above?

    A Stock audit by external agencies every three years Correct Answer Incorrect Answer
    B Stock audit by external agencies every five years Correct Answer Incorrect Answer
    C Stock audit by external agencies every year Correct Answer Incorrect Answer
    D Valuation of collaterals every three years Correct Answer Incorrect Answer
    E Valuation of collaterals every year Correct Answer Incorrect Answer

    Solution

    To address the issue of divergence in the assessment of security value, it is mandatory for NPAs with a balance of ₹5 crore and above to undergo stock audit at annual intervals by external agencies appointed as per the guidelines approved by the Board. This measure aims to enhance the reliability of stock valuation. Additionally, collaterals such as immovable properties charged in favor of the bank should be valued once in three years by valuers appointed as per the guidelines approved by the Board of Directors.

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