Financial Awareness - Risk, Stability & Emerging Finance
Which of the following is NOT a tool used by banks to manage and reduce Non-Performing Assets (NPAs)?
Which of the following is NOT a tool used by banks to manage and reduce Non-Performing Assets (NPAs)?
hard Q10 of 15
Step-by-Step Solution
Step 1: Identify NPA management tools
Banks use OTS, DRTs, and ARCs to recover or restructure NPAs.Step 2: Understand Priority Sector Lending
Priority Sector Lending is a credit allocation policy, not a tool for managing NPAs.Step 3: Eliminate incorrect options
OTS, DRTs, and ARCs directly help in NPA recovery or resolution.Final Answer:
Priority Sector Lending → Option AQuick Check:
Priority Sector Lending = correct ✅
Quick Trick: Remember Priority Sector Lending is credit policy, not NPA tool.
Common Mistakes:
- Confusing credit policies with recovery mechanisms.
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