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Which situation alone does NOT make a loan an NPA?

hard Q8 of 15
Banking Awareness - Basics Of Banking & Banking Terminology
Which situation alone does NOT make a loan an NPA?
AInterest overdue for 120 days
BPrincipal unpaid for 95 days
CBorrower defaulting on instalments
DDecline in collateral market value
Step-by-Step Solution

  1. Step 1: Identify NPA trigger

    NPA status depends on repayment, not collateral value.

  2. Step 2: Eliminate repayment-based triggers

    Overdue instalments lead to NPA.

  3. Final Answer:

    Decline in collateral market value → Option D

  4. Quick Check:

    Repayment default matters, not asset value ✅
Quick Trick: Collateral value ≠ NPA trigger.
Common Mistakes:
  • Linking NPA directly with collateral fall.
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