Skip to content

CMA Final · Risk Management in Banking and Insurance · Management of Non-Performing Assets (NPAs)

A resolution applicant has an account classified as a non-performing asset. This account was acquired pursuant to a prior resolution plan approved under the Insolvency and Bankruptcy Code, 2016. Under Explanation II to Section 29A(c), for how long does the NPA-related disqualification of clause (c) not apply to this applicant?

The disqualification in Section 29A(c) does not apply for three years from the date the Adjudicating Authority approved the earlier resolution plan under which the NPA account was acquired. The period is counted from approval of that plan, not from the NPA classification or from commencement of the earlier insolvency process.

  1. AOne year from the date of approval of the prior plan by the Adjudicating Authority
  2. BTwo years from the date of commencement of the prior CIRP
  3. CThree years from the date of approval of the prior plan by the Adjudicating AuthorityCorrect
  4. DThree years from the date of NPA classification by the bank

Explanation

Explanation II to clause (c) says that where the NPA account was acquired pursuant to a prior approved resolution plan, clause (c) does not apply to the applicant for three years from the date of approval of that plan by the Adjudicating Authority. The period runs from approval, not from classification or CIRP commencement, so the other options use the wrong period or wrong starting point.

Did you get it right without looking?

One question tells you little. A timed set on Management of Non-Performing Assets (NPAs) shows your real accuracy, how long you take and where you lose marks.

Practise Management of Non-Performing Assets (NPAs)Free diagnostic mock

More Management of Non-Performing Assets (NPAs) questions