Module: | Introduction and Definitions
Q4: Under the SARFAESI Act framework, the classification of a borrower's account as a "Non-Performing Asset" (NPA) is a mandatory prerequisite for enforcement. Which authority issues the guidelines for this classification?
✅ Correct Answer: B
The SARFAESI Act relies on the definition of Non-Performing Assets (NPA) as declared by the Reserve Bank of India (RBI). Banks must follow the prudential norms issued by the RBI to classify an account as NPA before initiating action under this Act.