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If a sub-standard asset remains unpaid for a period of 12 more months; it would be termed as?

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If a sub-standard asset remains unpaid for a period of 12 more months; it would be termed as?
1). Doubtful asset
2). Special Mention Account
3). Bad Asset
4). Second Default


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Answered by on | Votes 3 |
If a sub-standard asset remains unpaid for a period of 12 more months; it would be termed as “Doubtful asset”.
If it remains a sub-standard asset till the end of 3 years, the bank needs to make provisioning as follows: 
• Up to one year- 25% of the outstanding amount in case of Secured loans; 100% of the outstanding amount in case of Unsecured loans
• Between 1-3 years- 40% of the outstanding amount in case of Secured loans; 100% of the outstanding amount in case of Unsecured loans
• For more than 3 years- 100% of the outstanding amount in case of Secured loans; 100% of the outstanding amount in case of Unsecured loans.

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