Banking · Asset Classification
Under what condition can a loan account that has been classified as a Non-Performing Asset (NPA) be upgraded to a Standard Asset?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The principal portion of the overdue amount must be paid, while the interest can be capitalized.
- 2The bank must have sanctioned a restructuring package that has been successfully implemented for six months.
- 3The account must have been fully serviced and regularized by receiving all overdue amounts (principal, interest, and other charges).✓
- 4The security must be fully realized and sold, with the sale proceeds credited to the account.
Correct answer
The account must have been fully serviced and regularized by receiving all overdue amounts (principal, interest, and other charges).
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