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IBC provides a resolution mechanism that is:

easy Q12 of 15
Banking Awareness - Banking Acts, Reforms & Risk Management
IBC provides a resolution mechanism that is:
AOpen-ended with no time limit
BTime-bound and legally supervised
CBased only on bank discretion
DFocused on deposit protection
Step-by-Step Solution

  1. Step 1: Recall the design of IBC

    IBC was introduced to avoid delays in recovery.

  2. Step 2: Identify the defining feature

    The process is legally supervised and follows strict timelines.

  3. Final Answer:

    Time-bound and legally supervised → Option B

  4. Quick Check:

    Time-bound insolvency resolution = IBC hallmark ✅
Quick Trick: Time limit + court process = IBC.
Common Mistakes:
MISTAKES
  • Assuming banks can resolve insolvency informally under IBC.
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