Multiple choice

As per SEBI (Mutual Fund) Regulations, 1996, an asset shall be classified as NPA if

  1. interest warrant bounces twice

  2. the issuer refuses to repay interest

  3. if the interest/installment becomes overdue for a period of 180 days

  4. if the interest/installment becomes overdue for a period of one quarter
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Under SEBI Mutual Fund Regulations 1996, an asset is classified as NPA if interest or installment remains overdue for one quarter (approximately 90 days). This aligns with RBI norms for NPAs. Options A and B describe specific instances but don't define the general rule. Option C mentions 180 days which is not the correct period. The one-quarter standard is widely followed in Indian financial regulations.

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