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    Question

    What is the main criterion for classifying a loan as a

    Non-Performing Asset (NPA)?
    A Default in interest payment for 90 days Correct Answer Incorrect Answer
    B Default in principal payment for 90 days Correct Answer Incorrect Answer
    C Default in both interest and principal payment for 90 days Correct Answer Incorrect Answer
    D Default in interest or principal payment for 90 days Correct Answer Incorrect Answer
    E Default in both interest and principal payment for 180 days Correct Answer Incorrect Answer

    Solution

    The loan becomes a non-performing asset when payments are overdue for 90 days. A loan is classified as an NPA if the principal or interest payment or both have remained overdue for a continuous period of more than 90 days

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