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

Mr. Rao is a promoter of Rao Steels Ltd, whose account was classified as an NPA under RBI guidelines. He wants to submit a resolution plan for Kaveri Textiles Ltd. Under Section 29A(c), he is ineligible if at the time of submission the NPA account exists and at least how long has lapsed from the date of NPA classification to the commencement of the corporate insolvency resolution process of Kaveri Textiles, unless the proviso is satisfied?

The period is one year. Under Section 29A(c), a person with an NPA account is ineligible when at least one year has lapsed from NPA classification to commencement of the corporate debtor's CIRP, unless overdue amounts with interest and charges are paid before submitting the plan.

  1. AOne yearCorrect
  2. BSix months
  3. CTwo years
  4. DThree years

Explanation

Section 29A(c) requires that at least one year has lapsed from the date of classification as NPA till the date of commencement of the CIRP of the corporate debtor. The proviso lets him become eligible if he pays all overdue amounts with interest and charges before submitting the plan. Six months, two years and three years are not the period in this clause.

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