Financial Awareness - Risk, Stability & Emerging Finance
Which of the following is a key regulatory challenge faced by RBI in controlling Non-Performing Assets (NPAs)?
Which of the following is a key regulatory challenge faced by RBI in controlling Non-Performing Assets (NPAs)?
medium Q4 of 15
Step-by-Step Solution
Step 1: Understand NPA control issues
Evergreening involves banks extending new loans to hide existing NPAs, undermining financial health.Step 2: Analyze options
Preventing evergreening of loans by banks is a major supervisory challenge for RBI. GST rates are set by the GST Council. Health insurance premiums are IRDAI's domain. Issuing currency is RBI's function but unrelated to NPAs.Final Answer:
Preventing evergreening of loans by banks → Option AQuick Check:
NPA control challenge = preventing loan evergreening ✅
Quick Trick: Associate NPAs with evergreening practices in banking.
Common Mistakes:
- Mixing NPA supervision with tax policy or insurance regulation.
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