Explain the following statements in brief on the point of reasoning: (v) Bank is giving emphasis on reduction on Non-performing Assets.

CS Professional · Banking - Law & Practice · PYQS · December 2021
Explain the following statements in brief on the point of reasoning: (v) Bank is giving emphasis on reduction on Non-performing Assets.

Answer & Explanation:

To improve the Interest Income of the Bank as interest on Non-performing Assets (NPAs) cannot be booked as income. To reduce the burden of making provisions out of profits earned by the Banks. To recycle the funds blocked in Non-performing Assets. An effort in meeting the RBI requirement i.e., Provisions and Capital Adequacy Ratio in respect of NPAs.

Topics: Banking Operations

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