Poet aed ene) Q3. Which one of the following is not an “internal cause’ of sickness? 1 bishonesty 2. Anadequate Bankctnance 3. Lack of aversincaton 4, Lack of skilled labour ‘Among the external causes, one of the mast common is inadequate Bank finance. peer) © 20 of 43 Exercise 2 Qt. Which one of the following is not an ‘account level” early warning signal of incipient sickness? 1. High rate of rejection of products by buyers Ww © 2 Larger and longer outstanding in bill accounts © 3. Failure to pay statutory liabilities in time 4. All the above ED = | High rate of rection of finished goods by buyers Is a ‘production activity level” indicator of incipient sickness.Perinat ts mame ieee Exercise 2 Q2. Which one of the following could be a sign of incipient sickness which can be discovered from’ financial indicators’ 4. The current Ratio is increasing 2. Decreasing debt-eauity ratio 3. Changing pattorn from cash to cre salas 4. All the above = = (2) & (2) above are signs of Improving financial health in the form of higher liquidity and solvency and not a sign of deteriorating financials,Rehabilitation and Recovery Process fee sc Exercise 2 (Q3. An account is assified as ‘SMA-7' ifthe prindpal or interest payment are overdue for 9 1. Minimum 15 days, 2. Minimum 50 days 3. Minimum 30 days 4. None of the above ‘An account is classified as SMA-2 if Principal or interest payment is overdue between 61-90 days, Pere nth era mee ree eis Exercise 3 Qi. What does ‘CAP’ stands for? 1. Correction of Accounting Practices 2. Correction of Account Phase 3. Corrective Action Plan w/ 4, None of the above = ‘Committee on Corrective Action Plan (CAP) is the empowered committee to effectively deal with sick MSMEs,ems Page 27 of 43, Exercise 3 Q2. Which one of the following is an important document to be filed by a sick enterprise along with the application with Committee on CAP? 1. Details of al abies ofthe enterprise w 2. The crtincate of Incorporation 3. Registration Caticato 4, None of the above a = ‘The information to be submitted to CAP/the Bank by the sick enterprise should include the latest audited ‘accounts Including its Net worth; Details of all its liabilities including the liabilities owed to the State or Central Government and unsecured creditors, if any; nature of stress faced by it; and suggested remedial actions. } Comin ka mane Pee ie Exercise 3 (3, What is the time limit for the committee on CAP to inform the enterprise, when an application is filed by a bank/lender and admitted by it? 1. 7 working days 2. S working days ~ 3.3 working days 4,10 working days Where an application js Tied by 8 bankllender and aarited by the Committe, the Committe shall noty the el eee eee eet the application or make a representation before the Committee and disclose the detalls ofall itslisiibes, including the lables oned to the State or Central Government and unsecured creditors, any, thin fifteen storing cays of receipe of such notice,Perea eames eee irc Exercise 4 Qi. As per extant RBI guidelines revival of viable/potentially viable sick MSE units/ enterprises should be done as per policy framework finalized by which orga 1. ROL 2, sIDat 3.nsIc 4. Bank tsolt “The Reserve Bank of India, vide Its circular No RBY/2012-13/273 dated November 1, 2012 had advised that Banks should put In place thelr own Board approved Restructuring/Rehabiltation policy for revival of vlable/potentialy viable sick MSE units/enterprises, feito tae ree eee cul Exercise 4 Q2. What is the upper limit, as regards exposure of an enterprise from the banking system, for applicability of the recent ‘one time debt restructuring’ scheme of RBI? 1. Rs 50 crore 2. Rs 10 crore 9.2525 x00 4. Its applicable to all MSME units naon ‘The restructuring Is permittad subject to the aggregate exposure, including non-fund based facies, of banks and NBFCs to the borrower not exceeding £ 25 crore as on January 1, 2019.Perak eta matees ee Rei Exercise 4 Q3. As per the terms of the recent RBI ‘one time debt restructuring’ scheme, what should be the asset classification of the account as on 01-01-2019? 1. Standard 2. Loss 3. Substandard 4, Doubtful [To be ellaible, the borrower's account should be in default but classified a ‘standard asset’ as on January) 41, 2018 and should continue to be classified as a standard asset till the date of implementation of the _ restructuring. feritire hears ree elec Exercise 5 QA. A“sub - standard” asset is one which has remained NPA up to. 4. 6 months or more 2. 2years or more 3.4 year or more 4.4 year or ts Tf the asset has Inter-alla remained NPA for a period of less than or equal to one year itis termed a sub- standard assat.Peer aine Pein Q2. What is the category given to an asset that has no value but still not written of? 9 1. Standard asset 2. Loss asset 3. Sub-standard asset 4, None of the above ‘Asset considered non recoverable and of litte value but not wiltten off wholly by the bank is categorized ‘as aloss asset. Pere etn tien Te ea Exercise 5 Q3. Which one of the following is a characteristic of an ‘out of order’ account? 4. Outstanding balance remains continuously In excess of the sanctioned limit/drawing power 2. There ate no credits continuously for 90 days as on the date of Balance Sheet 3. Credits are not enough to cover the interest debited during a quarter 4. All the above W~ ’An out of order account is one in which the outstanding balance remains continuously in excess ofthe sanctioned linit/@rawing power or the outstanding balance is less than the sanctioned lmit/araving power, but there are no credits continuously for 90 days as on the date of Balance Sheet or credits are nat enough te caver the interest debited during the same period.