CA Inter P5 · Chapter 10 · Question 2 of 11
Under the RBI prudential norms, a term loan becomes a non-performing asset when:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Interest and/or an instalment of principal remains overdue for a period of more than 90 days
Explanation
Under RBI's income recognition and asset classification norms, a term loan is a non-performing asset where interest and/or an instalment of principal remains overdue for more than 90 days. Rating downgrades or review delays may be warning signals but do not by themselves define an NPA.
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