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WorksheetsRBI Recovery Policy Quiz
Total questions: 99
Worksheet time: 50mins
What is the primary objective of RBI's recovery policy?
Credit growth
Profit maximization
Resolution of stressed assets
Tax revenue collection
What does NPA stand for in banking terminology?
Net Profit Asset
Non-Priority Asset
Non-Payment Account
Non-Performing Asset
As per RBI, an asset is classified as an NPA if repayment is overdue for more than how many days?
60 days
30 days
90 days
120 days
Which of the following is not part of RBI's recovery framework?
Lok Adalat mechanism
FEMA Regulations
SARFAESI Act
Insolvency and Bankruptcy Code (IBC)
What is the full form of SARFAESI?
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest
None of the above
Secured Assets and Recovery of Financial Equity in India
Statutory Rules for Assets and Financial Equity Security Interest
Which category of assets is least risky according to RBI guidelines?
Substandard assets
Standard assets
Doubtful assets
Loss assets
A doubtful asset is one that has remained in the substandard category for how many months?
More than 24 months
Less than 12 months
18-24 months
More than 12 months
Which of the following is a tool used by banks to recover NPAs?
Foreign investment
Tax incentives
Compromise settlement
Capital infusion
What is the provision requirement for substandard secured assets as per RBI norms?
5%
25%
15%
10%
Which type of NPA category involves assets where the loss is identified, and recovery is uncertain?
Loss assets
Substandard assets
Standard assets
Doubtful assets
What is the main objective of the SARFAESI Act, 2002?
Facilitate speedy recovery of bad loans
Ensure priority sector lending
Promote rural credit
Regulate asset reconstruction companies
Which authority is responsible for resolving cases under the Insolvency and Bankruptcy Code (IBC)?
RBI
NCLT
NABARD
SEBI
Under SARFAESI, banks can seize assets without court intervention if the borrower defaults on a loan secured by:
Fixed deposits
Immovable property
Movable property
Government bonds
What is the full form of ARC in the context of recovery policies?
Asset Regulatory Committee
Asset Review Council
Asset Refinancing Corporation
Asset Reconstruction Company
What is the minimum threshold of default for initiating Corporate Insolvency Resolution Process (CIRP) under IBC?
₹1 lakh
₹1 crore
₹10 lakh
₹50,000
RBI introduced a revised framework for resolution of stressed assets in which year?
2017
2021
2015
2019
What is the key feature of the Prudential Framework for Resolution of Stressed Assets, 2019?
Mandatory referral to Lok Adalats
Time-bound resolution process
Scrapping of SARFAESI Act
Reduced provisioning norms
Which RBI mechanism aims to settle small-value disputes related to loan recovery?
Insolvency proceedings
Arbitration Act
Debt Recovery Tribunal
Lok Adalat
Which committee recommended the establishment of Asset Reconstruction Companies in India?
Narasimham Committee
Malegam Committee
Rangarajan Committee
Kelkar Committee
What is the time limit under IBC for completing the Corporate Insolvency Resolution Process (CIRP)?
330 days
90 days
180 days
270 days
Who supervises the functioning of Asset Reconstruction Companies (ARCs)?
RBI
NCLT
Ministry of Finance
SEBI
Under the SARFAESI Act, what is the minimum threshold loan amount for taking possession of secured assets?
₹1 lakh
₹10 lakh
₹50,000
₹5 lakh
Which type of loans are not covered under the SARFAESI Act?
Personal loans
Housing loans
Industrial loans
Agricultural loans
How many days’ notice must a bank give under SARFAESI before taking possession of the secured asset?
15 days
45 days
30 days
60 days
Which tribunal hears disputes related to SARFAESI actions?
Debt Recovery Tribunal (DRT)
Lok Adalat
Consumer Forum
NCLT
What is the primary objective of the Insolvency and Bankruptcy Code (IBC), 2016?
Promote exports
Impose penalties for non-performing assets
Provide a time-bound resolution process for stressed assets
Encourage mergers and acquisitions
Who can file an application under the IBC?
The debtor
Operational creditors
All of the above
Financial creditors
The resolution professional under the IBC is appointed by:
RBI
Ministry of Corporate Affairs
Committee of Creditors
SEBI
What percentage of voting share is required for approval of a resolution plan by the Committee of Creditors?
66%
100%
50%
75%
Which of the following is not a resolution mechanism under IBC?
Liquidation
Debt settlement by Lok Adalat
CIRP
Pre-packaged insolvency resolution
Debt Recovery Tribunals were established under which act?
Recovery of Debts Due to Banks and Financial Institutions Act, 1993
Insolvency and Bankruptcy Code, 2016
Companies Act, 2013
Banking Regulation Act, 1949
What is the minimum loan amount for a case to be referred to a DRT?
₹5 lakh
₹20 lakh
₹10 lakh
₹50,000
Appeals against DRT decisions can be filed with:
Supreme Court
District Court
NCLT
Debt Recovery Appellate Tribunal (DRAT)
What is the time limit for filing an appeal against a DRT order?
60 days
45 days
30 days
15 days
Which institution manages and coordinates DRTs across India?
Department of Financial Services
Ministry of Corporate Affairs
RBI
SEBI
Lok Adalats function under which legal framework?
Legal Services Authorities Act, 1987
Banking Regulation Act, 1949
Consumer Protection Act
Arbitration and Conciliation Act, 1996
Which of the following disputes can Lok Adalats resolve?
High-value corporate loans
Small and medium-value personal loans
Foreign trade-related disputes
International disputes
Which of the following is a benefit of resolving disputes in Lok Adalats?
All of the above
Expedited resolution
Binding decision
Low cost
The RBI's framework for compromise settlement mainly targets loans under:
All types of loans
MSME sector
Agricultural loans
Corporate lending
Which principle is followed by Lok Adalats for dispute resolution?
Government intervention
Strict legal interpretations
Conciliation and mutual agreement
Adversarial litigation
The RBI issued the first guidelines for handling stressed assets in which year?
1995
2001
The Strategic Debt Restructuring (SDR) mechanism was introduced to:
Liquidate assets of defaulters
Convert debt into equity for revival of stressed firms
Encourage loan waivers
Settle disputes through Lok Adalats
Which framework replaced the Joint Lenders' Forum (JLF) in 2019?
IBC
Debt Recovery Tribunal
Prudential Framework for Resolution of Stressed Assets
Lok Adalat Scheme
What is the deadline for banks to implement a resolution plan under the RBI's Prudential Framework?
No specific deadline
180 days from default
90 days from default
365 days from default
Which regulatory change has significantly enhanced the effectiveness of the RBI’s recovery framework?
Introduction of GST
Liberalization of foreign investment norms
IBC and amendments to SARFAESI Act
Demonetization
Provisioning for a doubtful asset for 1 year is mandated at what percentage?
25%
40%
Loss assets require what percentage of provisioning?
100%
25%
50%
75%
The primary function of ARCs under the SARFAESI Act is:
Recovery of bad debts through securitization
Writing off NPAs for banks
Providing subsidies for stressed sectors
Promoting credit flow to industries
What is the minimum capital requirement for setting up an Asset Reconstruction Company (ARC) in India?
₹50 crore
₹300 crore
₹150 crore
₹100 crore
ARCs purchase NPAs from banks through:
Direct sale
Asset transfer agreements
All of the above
Issuance of security receipts
Who regulates the activities of recovery agents employed by banks?
Reserve Bank of India (RBI)
SEBI
Indian Banks Association (IBA)
Ministry of Finance
Which of the following guidelines must recovery agents comply with?
Consumer Protection Act
SARFAESI Act
Fair Practices Code
All of the above
Recovery agents are prohibited from engaging in:
Intimidation or harassment of borrowers
Asset valuation
Negotiation of repayment terms
Settlement agreements
Banks must ensure that recovery agents are:
Certified by IIBF
All of the above
Properly trained
Monitored for compliance
Under RBI's Fair Practices Code, recovery agents must adhere to:
Fixed recovery timings
Borrower's privacy rights
All of the above
No physical force during recovery
What is the primary purpose of an Early Warning System (EWS) in banking?
Detect potential defaults in advance
Automate loan approvals
Prevent loan disbursal
Promote credit flow to startups
Which of the following is not an indicator of financial stress in a borrower?
High credit score
Overutilization of credit limits
Delayed payments
Frequent cheque bounces
What is a major risk mitigation measure in the recovery framework?
Diversification of loans
Securitization of assets
Stringent credit appraisal
All of the above
RBI mandates that banks create a Fraud Monitoring Committee for:
SME loans
Large-value fraud cases
Agricultural loans
Educational loans
What is the role of a credit bureau like CIBIL in the recovery process?
Provide credit score data
Reduce asymmetric information for lenders
All of the above
Assist in tracking borrower history
What is the minimum default threshold for pre-pack insolvency proceedings for MSMEs under IBC?
₹50 lakh
₹25 lakh
₹10 lakh
₹1 crore
Which resolution mechanism was introduced during the COVID-19 pandemic to support stressed borrowers?
Loan waivers for MSMEs
Restructuring 1.0 and 2.0 schemes
Emergency credit line guarantees
Debt consolidation programs
RBI's Resolution Framework 2.0 was primarily aimed at which sector?
International trade borrowers
MSMEs and retail borrowers
Public sector banks
Large corporates
Under the 2019 Prudential Framework, banks failing to implement a resolution plan must:
Write off the loan
Refer the account to NCLT
Provide additional provisions
Seek RBI approval
Which entity oversees the restructuring of cooperative banks’ stressed assets?
NCLT
NABARD
Ministry of Agriculture
RBI
Which country has the most advanced bankruptcy system used as a model for IBC?
Japan
UK
Germany
USA
The Chapter 11 bankruptcy mechanism in the USA is similar to which Indian provision?
None of the above
CIRP under IBC
Debt Recovery Tribunal fast-track processes
Lok Adalat
Which international organization has supported India's IBC development?
Asian Development Bank
IMF
WTO
World Bank
What percentage of total NPAs in India are estimated to be resolved through the IBC framework?
70%
90%
30%
50%
What is the primary objective of a "Bad Bank"?
Issuance of government bonds
Monitoring foreign exchange reserves
Resolution of stressed assets
Loan disbursal
What is the name of the "Bad Bank" set up in India for NPA resolution?
Indian Stressed Asset Bank
Reserve Bank of India
National Asset Reconstruction Company Limited
Asset Reconstruction Bank of India
Which entity will manage the assets purchased by NARCL?
Insolvency Professionals
India Debt Resolution Company Limited (IDRCL)
SEBI
RBI
NARCL focuses on stressed assets of what value?
Between ₹10 crore and ₹50 crore
All types of assets
Below ₹10 crore
Above ₹500 crore
Which government initiative supports NARCL's guarantee for resolution?
Emergency Credit Line Guarantee Scheme
Sovereign Guarantee for NPA Resolution
Partial Credit Guarantee Scheme
Asset Protection Scheme
Which of the following government schemes directly supports MSME recovery?
Emergency Credit Line Guarantee Scheme (ECLGS)
Kisan Credit Card Scheme
Pradhan Mantri Mudra Yojana
Stand-Up India Scheme
RBI's regulatory sandbox encourages innovation in:
Credit appraisal models
Asset recovery tools
FinTech for stress resolution
All of the above
Which regulatory act governs wilful defaulters in India?
SARFAESI Act
Banking Regulation Act, 1949
Insolvency and Bankruptcy Code, 2016
Companies Act, 2013
The RBI's framework for "Wilful Defaulters" is applicable to loans above:
₹5 crore
₹1 crore
₹25 lakh
₹50 lakh
Wilful defaulters are prohibited from accessing:
Fresh credit facilities
Participating in capital markets
Setting up new businesses
All of the above
What sector receives special consideration under the Priority Sector Lending (PSL) framework?
All of the above
Agriculture
MSMEs
Affordable housing
RBI's restructuring scheme for MSMEs during the pandemic allowed a moratorium for how many months?
12 months
9 months
6 months
3 months
The government's "One-Time Loan Restructuring" scheme was introduced primarily for:
Agricultural loans
Corporates
MSMEs and retail borrowers
Export-oriented units
Which sector was the primary target of RBI's Resolution Framework 1.0 introduced in 2020?
COVID-affected businesses
Manufacturing
Educational institutions
Real estate
What is the maximum repayment period for restructured loans under the MSME framework?
1 year
10 years
5 years
3 years
The RBI's Central Repository of Information on Large Credits (CRILC) monitors accounts with exposure of:
₹5 crore and above
₹50 crore and above
₹1 crore and above
₹100 crore and above
Which committee within banks oversees stressed asset resolution?
Credit Rating Committee
Risk Management Committee
Loan Appraisal Committee
Stressed Assets Management Committee
What is the primary focus of the Prompt Corrective Action (PCA) framework by RBI?
Boosting sectoral credit growth
Closure of weak banks
Timely identification of stressed banks
Disbursal of emergency credit
Which of the following is not a corrective measure under PCA?
Curtailing branch expansion
Restrictions on dividend distribution
Capital infusion by promoters
Asset seizure by RBI
The RBI monitors stressed assets and recovery through its:
Financial Stability Report (FSR)
Annual Credit Report
Banking Ombudsman Scheme
Monetary Policy Framework
What emerging technology is being used to track and recover stressed assets?
Artificial Intelligence (AI)
Data Analytics
All of the above
Blockchain
Digital lending platforms assist recovery by:
All of the above
Automating borrower tracking
Enhancing data-driven decision-making
Offering digital payment solutions
A major challenge in India's recovery framework is:
Insufficient technological adoption
High operational costs
Lengthy legal procedures
Lack of trained personnel
Which global economic crisis highlighted the importance of asset recovery mechanisms?
COVID-19 Pandemic (2020)
Asian Financial Crisis (1997)
Eurozone Debt Crisis (2010)
Global Financial Crisis (2008)
Which recovery mechanism is gaining traction due to its faster resolution timeline?
IBC
Lok Adalats
NARCL mechanisms
SARFAESI Act
What does "haircut" mean in loan recovery?
Recovery of interest-only payments
Loss incurred by lenders during resolution
Offering fresh loans post-default
Reduction in repayment timeline
RBI mandates a credit rating review for stressed borrowers every:
12 months
6 months
18 months
3 months
Which legal process is considered the slowest in recovering stressed assets?
Lok Adalats
SARFAESI
IBC
DRT
India's recovery rate under IBC compared to SARFAESI is:
Same
Higher
Lower
Not comparable
The future of asset recovery in India depends on:
Technology integration
All of the above
Strengthening IBC and SARFAESI frameworks
Faster dispute resolution
