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

Under Explanation II to Section 29A(c), where an NPA account was acquired by a resolution applicant pursuant to a prior resolution plan approved under the Code, the NPA-related disqualification does not apply to that applicant for a period of:

The relief lasts three years from the date the Adjudicating Authority approved the earlier resolution plan under which the NPA account was acquired. During this period the NPA-related bar in Section 29A(c) does not apply to the applicant. The period runs from plan approval, not from NPA classification.

  1. AOne year from the date of approval of that plan by the Adjudicating Authority
  2. BTwo years from the date of approval of that plan by the Adjudicating Authority
  3. CThree years from the date of approval of that plan by the Adjudicating AuthorityCorrect
  4. DThree years from the date of classification of the account as NPA

Explanation

Explanation II provides that clause (c) shall not apply for three years from the date the Adjudicating Authority approves the prior resolution plan under which the NPA account was acquired. The period runs from approval, not from NPA classification. One and two years are confusions with the one-year NPA lapse and the two-year post-release period in clause (d).

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