Module: | Priority Sector, Consumer Protection & Digital Lending
Q139: Consider the following statements regarding asset classification categories:
1. A "doubtful asset" is one that has remained in the substandard category for a period exceeding 12 months.
2. A "loss asset" is an asset where loss has been identified by the bank or auditors, but the amount has not been written off wholly.
Which of the statements given above is/are correct?
2. A "loss asset" is an asset where loss has been identified by the bank or auditors, but the amount has not been written off wholly.
Which of the statements given above is/are correct?
✅ Correct Answer: C
The correct answer is C. Both statements are accurate under RBI's IRAC norms.
Statement 1 is correct: An asset is classified as a "doubtful asset" if it has remained in the "substandard" category for a continuous period exceeding 12 months.
Statement 2 is correct: A "loss asset" is one where a loss has been identified by the bank, internal auditors, or RBI inspection, and its realizable value is practically negligible, even if the amount has not yet been wholly written off from the bank's books.
Statement 1 is correct: An asset is classified as a "doubtful asset" if it has remained in the "substandard" category for a continuous period exceeding 12 months.
Statement 2 is correct: A "loss asset" is one where a loss has been identified by the bank, internal auditors, or RBI inspection, and its realizable value is practically negligible, even if the amount has not yet been wholly written off from the bank's books.