Banking & Finance MCQs

The report projected the GNPA ratio to remain at a comfortable level, around 3.0%, indicating improved asset quality.

The report highlighted Commercial Real Estate as a sector facing potential asset quality issues due to various economic factors.

Under the SBR framework, especially for NBFCs in the Upper Layer, enhanced disclosures are mandated in areas such as capital adequacy, asset quality, liquidity risk management, and importantly, related party transactions and exposures to entities within the same group.

The primary objective of mandating enhanced disclosure norms under the SBR framework is to increase transparency in the operations of NBFCs, strengthen corporate governance, and enable better market discipline and public oversight.

The Scale Based Regulation (SBR) framework categorizes NBFCs into different layers. NBFCs in the Upper Layer (NBFC-UL) are deemed systemically significant and are subject to the most stringent regulatory and disclosure requirements, including enhanced public disclosures.

The RBI's framework allows for various resolution strategies like restructuring, change in ownership, or sale of assets. However, an automatic 100% write-off of outstanding debt is not a permissible resolution strategy; write-offs are typically a measure taken after other resolution attempts fail and are subject to specific policies.

The RBI's Framework for Resolution of Stressed Assets (June 7, 2019) generally mandates that a resolution plan, once invoked, must be implemented within 180 days. Failure to implement within this period requires the account to be classified as an NPA.

Under various RBI frameworks for resolution of stressed assets in MSMEs, including the one-time restructuring schemes, the aggregate exposure limit for an MSME borrower to be eligible for resolution without an asset classification downgrade has typically been ₹25 crore.

The RBI's Regulatory Framework for Digital Lending mandates that Lending Service Providers (LSPs) engaged by Regulated Entities (REs) must conduct annual external IT audits and submit the reports to the respective REs.

A core objective of RBI's digital lending framework, including its cybersecurity aspects, is to protect customer data, ensure privacy, and implement robust security measures to prevent data breaches and misuse.