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Module: General Practice

Q30: According to the Reserve Bank of India’s prudential norms for asset classification, at what point is an MSME loan account classified as a Non-Performing Asset (NPA) based on the "overdue" period?

A
When the interest or principal remains overdue for a period of more than 180 days.
B
When the interest or principal remains overdue for a period of more than 90 days.
C
When the interest or principal remains overdue for a period of more than 60 days.
D
When the interest or principal remains overdue for a period of more than 30 days.
✅ Correct Answer: B
🎯 Quick Answer:
90 days.
Concept Definition: A Non-Performing Asset (NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days.
Structural Breakdown: Term Loans: NPA if interest/installment is overdue for > 90 days.
Cash Credit/Overdraft: NPA if the account remains "out of order" (balance > limit or no credit) for more than 90 days.
Crop Loans: Overdue for 2 crop seasons (short duration) or 1 crop season (long duration). Historical/Related Context: While MSMEs previously had forbearance (180 days) during certain past crises (e.g., GST transition), the standard regulatory norm for NPA classification in 2026 remains the 90-day overdue rule.
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