Financial Awareness - Risk, Stability & Emerging Finance
Which of the following is NOT a direct consequence of high Non-Performing Assets (NPAs) for banks?
Which of the following is NOT a direct consequence of high Non-Performing Assets (NPAs) for banks?
medium Q7 of 15
Step-by-Step Solution
Step 1: Understand effects of high NPAs
High NPAs increase provisioning, reduce profits, and lower capital adequacy.Step 2: Analyze credit rating impact
High NPAs negatively affect credit ratings, not improve them.Final Answer:
Improved credit rating → Option DQuick Check:
Improved credit rating = correct ✅
Quick Trick: High NPAs worsen credit rating, not improve it.
Common Mistakes:
- Assuming NPAs improve bank creditworthiness.
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