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Genesis Academy for Banking and Finance

Strategies for Loan Recovery & Dealing with Difficult Borrower

1. The RBI’s directives on recovery emphasizes on

a) Dignity & Respect to the Borrower
b) Due Notice being given to the Borrower
c) Courtesy & Fair treatment being given to the Borrower
d) All of the above.

2. A ‘Standard Asset’ of a bank is defined as an asset which is:

a) Not a Non- Performing Asset (NPA)
b) A Doubtful Asset
c) A Loss Asset
d) None of the above

3. A loan or advance of a bank is defined as ‘Non Performing Asset’ (NPA) when it

remains overdue or out of order for a period of:
a) Less than 90 days
b) For 90 days
c) Over 90 days
d) Over 180 days

4. Debtors are classified as:

a) Normal, Difficult and Doubtful
b) Standard, Sub standard and Doubtful
c) Prompt , Irregular and Regular
d) None of the above

5. Willful defaulters show following responses:

a) They would avoid responding to the calls of the recovery agents
b) They would meetings with recovery agent canceling appointments
c) They will give falls promises
d) All the above

6. In case of a ‘willful defaulter’, the recovery agent should:

a) Collect the documentary evidence to prove the debtor’s negative
responses to his collection efforts
b) Preserve the documentary evidence
c) Collect and send the documentary evidence to the principal
d) Collect, preserve and send copies of the documentary evidence to the
principal for further action.

2. While making a first telephone call to a customer for recovery of dues, a recovery
agent should:
a) Only disclose his/ her identity
b) Disclose his/ her identity and also authority to collect the dues
c) Discuss with the customer about payment of the dues
d) Do both (b) and (c) above
3. Before making a telephone call to a customer, a recovery agent should ensure
a) He has been authorized by the bank to collect the due debt from the
b) The customer has been notified by the bank of the details (name,
telephone number, etc) of the recovery agent for collection of the due
c) Both the above requirements are followed
d) None of the above is necessary

4. Common points to be followed in recovery strategies:

a) Establishing good rapport with the debtor
b) Go through KYC and personal profile of the borrower
c) Go through the copy of loan agreement
d) All the above

7. Securitization and Reconstruction of Finance Assets and Enforcement of

Banking Security Interest (SARFAESI) Act allowed the bank to take possession
of assets of defaulting borrowers charged to the bank:
a) With legal process
b) Without legal process
c) With permission of Lok Adalat
d) None

5. Lok Adalats are

a) Set up by the State Authority, District Authority, the High Court, the
Supreme Court etc.
b) It is headed by the retired judges, social activists, or other members
of the legal profession.
c) the award is final and cannot be appealed, not even under Article
226 because it is a judgment by consent.
d) All of the above.