Banking & Finance MCQs - 2026-05-30

The Inter-Creditor Agreement (ICA) is a crucial tool encouraged by the RBI. It facilitates a common resolution strategy among multiple lenders to a stressed borrower, ensuring coordinated efforts and avoiding fragmented approaches.

RBI's frameworks for stressed asset resolution are generally comprehensive, covering all regulated entities under its purview, including banks, NBFCs, and other financial institutions, to ensure a consistent and effective approach across the financial sector.

The new framework emphasizes early identification and resolution of stressed assets, often by mandating specific timelines for resolution plans and requiring referral to the National Company Law Tribunal (NCLT) under the IBC if a resolution is not achieved within the stipulated period.

Enhanced prudential norms for NBFCs are comprehensive, aiming to improve capital adequacy, asset quality, risk management, corporate governance, and transparency to ensure a robust and stable financial sector.

RBI classifies NBFCs based on whether they accept public deposits (Deposit-taking vs. Non-deposit taking) and their asset size/systemic importance (Systemically Important vs. Non-Systemically Important). 'Public Sector' refers to ownership, not a regulatory classification category for NBFCs by RBI.

The primary objective of RBI enhancing prudential norms for NBFCs is to strengthen financial stability, mitigate risks, and protect the interests of depositors and the broader financial system.