Updated for 2026 Syllabus Detailed Explanations High-Yield Core Concepts

Bank Promotion Exam Guide

Banking Awareness | Banking Knowledge | for all Bank Exams

Home » IIBF MSME Exam – Top… » General Practice
Module: General Practice

Q157: For an MSME account to be eligible for "Restructuring" without a downgrade in asset classification (retaining Standard status), what is the typical requirement regarding the "Promoter's Contribution"?

A
Promoters must contribute at least 50% of the outstanding debt.
B
Promoters are not required to contribute any additional funds.
C
Promoters must bring in additional contribution as per the bank's policy, typically ensuring they have 'skin in the game'.
D
The government provides the entire contribution under CGTMSE.
✅ Correct Answer: C
🎯 Quick Answer:
Additional contribution ensuring 'skin in the game'.
Concept Definition: Promoter's Contribution refers to the personal capital the business owners inject during a restructuring package.
Regulatory Intent: RBI norms stipulate that for a restructuring package to be approved, promoters must sacrifice some of their own rights or bring in capital.
This demonstrates their commitment ("skin in the game") to reviving the unit.
Specifics: While exact percentages can vary by bank policy and specific RBI circulars (historically often around 15-20% of the sacrifice or additional funding), the core principle is that restructuring is not a "free lunch" for the borrower; they must share the financial burden.
← Previous (Q156) Which of the following activities is excluded... Next (Q158) → What is the purpose of a "Techno-Economic Via... 📚 Back to General Practice

🔄 More from General Practice: