Banking Awareness - Basics Of Banking & Banking Terminology
Which situation clearly indicates that a bank asset has become non-performing?
Which situation clearly indicates that a bank asset has become non-performing?
easy Q1 of 15
Step-by-Step Solution
Step 1: Identify performance criterion
A performing asset must generate regular income.Step 2: Apply NPA definition
If interest income stops, the asset becomes non-performing.Final Answer:
Interest income has stopped on the loan → Option AQuick Check:
No income to bank = NPA ✅
Quick Trick: No interest inflow = NPA.
Common Mistakes:
- Focusing on collateral instead of income.
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