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WorksheetsRecovery management chapter 6
Total questions: 20
Worksheet time: 10mins
Name
Class
Date
1.
Identify the action that would come top-most in the hierarchy of sacrifice by the bank in a negotiated settlement.
a)
Forgoing penal interest
b)
Forgoing interest to be charged from the date of NPA till the current date
c)
Forgoing unrealized interest
d)
Forgoing part of the principle amount
2.
Which of the following factors would not be considered while calculating the negotiable amount by the bank?
a)
Profitability of the borrower's business
b)
Reasons for default
c)
Probability of recovery in the normal course
d)
Provisions made
3.
If the balance in a shadow account is Rs. 358000 which includes principle of Rs. 300000 and a recovery of 320000 is made through an OTS, it would result in a
a)
Waiver
b)
Write off
c)
Review
d)
Full settlement
4.
Identify the correct statement
a)
Banks have formed their own guidelines for OTS settlements
b)
OTS is not the same as negotiated settlement
c)
OTS can be granted irrespective of the impact on P&L
d)
OTS can be given even for accounts that are regular
5.
If the balance in a shadow account is Rs. 358000 which includes principle of Rs. 300000 and a recovery of 250000 is made through an OTS, it would result in a
a)
Waiver and write off
b)
Waiver only
c)
Write off only
d)
Resolution of the account
6.
Which of the following are not the reasons that lead to a compromise from the bank's side?
a)
Existing security value is higher than the outstanding amount
b)
Net worth of the borrower/guarantor is low
c)
Dispute in the title of the security
d)
Ensuring speedy recovery of accounts
7.
Which of the following cannot be waived off with respect to negotiated settlement?
a)
Outstanding principle amount
b)
Penal interest
c)
Notional interest from date of NPA
d)
Legal or any out of pocket expenses
8.
Which of the following accounts are not related to a negotiated settlement?
a)
P & L account
b)
Memorandum account
c)
Shadow account
d)
Real account
9.
Which of the following is not true?
a)
OTS cannot be considered for a suit filed account
b)
There would be a time limit for the payment of dues under OTS
c)
Bank should have a buffer amount over and above the base negotiable amount calculated by the bank
d)
The compromise can be done through Lok Adalat for additional authenticity
10.
Which of the following is not a type of settlement under OTS?
a)
Revival
b)
Full settlement
c)
Waiver
d)
Write off
11.
Which of the following is not a reason behind bank's decision to consider a compromise?
a)
Increased marketability of charged securities
b)
Closure of activity
c)
Death of borrower
d)
Low net worth of borrower and guarantor
12.
If the outstanding in a shadow account is Rs. 165800, with a principle of Rs. 134100 and Rs. 22000 notional interest post NPA date, which amount is most likely to be initially forgone by the bank as a sacrifice?
a)
22000
b)
9700
c)
134100
d)
156100
13.
Recovering dues through OTS will be considered when it leads to a
a)
Positive impact on P&L
b)
Negative impact on P&L
c)
Increase in provisions
d)
Reduction in capital
14.
One time settlement is also called as
a)
Compromise settlement
b)
Court settlement
c)
Legal settlement
d)
Decree of the court
15.
OTS has to be considered after
a)
recovering dues of subsidies and agencies like CGTMSE/ECGC
b)
filing insolvency petition
c)
extending the loan
d)
restructuring the loan
16.
What would lead to write off?
a)
Unrecovered principle amount
b)
Unrecovered interest amount
c)
Unrecovered principle & interest amount
d)
Unrecovered legal expenses
17.
What would lead to waiver?
a)
Unrecovered interest and other charges
b)
Unrecovered principle
c)
Unrecovered principle and interest
d)
Unrecovered penal interest
18.
In which of the following cases, banks must not consider negotiating a settlement?
a)
Case of wilful default
b)
Case of business failure
c)
Case of crop failure
d)
Case of borrower's death
19.
What is the maximum amount of loan value that can be considered under OTS?
a)
There is no maximum limit
b)
5 crores
c)
25 lakh
d)
1 lakh
20.
Which of the following is not an advantage of OTS?
a)
Haircut to the borrower
b)
Low cost
c)
Speedy recovery
d)
Simple procedure compared to other avenues
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