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The link to some of the MCQs has been given below for practice by readers.
🎯 Practice PSL MCQs Interactively
Per RBI (Commercial Banks – Asset Classification, Provisioning and Income Recognition) Directions, 2026 — issued 27 April 2026, effective 1 April 2027. The 90-day NPA test is retained; a separate ECL three-stage provisioning framework is layered on top.
| Facility | When classified as NPA |
|---|---|
| Term Loan | Interest and/or principal remains overdue for more than 90 days (also applies to bills purchased and discounted). |
| Cash Credit / Overdraft (CC/OD) | When the account is “out of order” — see criteria below. Also NPA if drawings are permitted for a continuous 90 days on a drawing power based on stock/receivable statements older than three months. |
| Agricultural Loans (specified facilities) | Crop-season basis: overdue for two crop seasons for short-duration crops (up to 12 months); overdue for one crop season for long-duration crops. Applies to crop loans, agri term loans, KCC, etc. |
| Other Agricultural Loans | Loans outside the specified agri list follow the ordinary 90-day delinquency norm. |
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“Out of order” test for CC/OD
A CC/OD account is “out of order” if any one of the following holds:
- the outstanding balance remains continuously in excess of the sanctioned limit / drawing power for 90 days; or
- there are no credits continuously for 90 days; or
- credits during the previous 90 days are not enough to cover the interest debited in that period.
Agricultural loans — key points
- Short-duration crop = up to 12 months from sowing to marketing; longer = long-duration crop.
- Crop-season norm covers specified facilities: loans to individual farmers (incl. SHG/JLG), agri term loans, pre/post-harvest loans, pledge against produce, KCC, corporate farmers/FPOs up to â‚ą4 crore, and PACS/FSS/LAMPS on-lending.
- On natural calamities: converted or rescheduled loans are treated as current dues and not classified NPA, subject to the RBI calamity-relief directions.
Common rules across all facilities
- Borrower-level classification: if any one exposure to a borrower is NPA, all exposures to that borrower are NPA.
- Sub-categories: Sub-standard (NPA up to 12 months), Doubtful (in sub-standard for 12 months), Loss (loss identified but not written off).
- Upgrade to standard only after the entire arrears of interest and principal across all facilities are repaid; borrower and co-borrower are jointly and severally liable.
- Date of NPA is the calendar date for which the day-end process is run.
Reference: Chapter II, RBI/DOR/2026-27/398, DOR.STR.REC.No.6/21.06.011/2026-27. For general reference only — not legal advice.