Module: General Practice
Q74: According to the RBI norms for Standard Asset Provisioning, what is the required provision percentage for the "General" category of advances (i.e., loans not falling under Agriculture, SME, or Commercial Real Estate)?
✅ Correct Answer: B
🎯 Quick Answer:
The provision requirement for General Standard Assets is 0.40%.This is known as "Standard Asset Provisioning." Structural Breakdown: 1. Agriculture & SME: 0.25% (Lowest risk weight preference). 2. Commercial Real Estate (CRE): 1.00% (Highest risk). 3. CRE-Residential Housing (CRE-RH): 0.75%. 4. General (All others): 0.40%. Historical Context: These rates have been stable for several years.
The differential rates are used by the RBI as a policy tool to encourage or discourage lending to specific sectors (e.g., higher provision for CRE discourages speculative real estate lending).