GATE Electrical 2020 | GA Question: 6

Question

Non-performing Assets $\text{(NPAs)}$ of a bank in India is defined as an asset, which remains unpaid by a borrower for a certain period of time in terms of interest, principal, or both. Reserve Bank of India $\text{(RBI)}$ has changed the definition of $\text{NPA}$ thrice during $1993-2004$, in terms of the holding period of loans. The holding period was reduced by one quarter each time. In $1993$, the holding period was four quarters $\text{(360 days)}$.

Based on the above paragraph, the holding period of loans in $\text{2004}$ after the third revision was ______ days.

• A. $45$
• B. $90$
• C. $135$
• D. $180$

Answer 1

Ans B.

As question says – holding period was reduced by one quarter each time. In 2004 – third revision.

In 1993 holding period – 360 days ( four quarters). One quarter – $\frac{1}{4} \times 360 = 90$. 

[quarter – each of four equal or corresponding parts into which something is or can be divided.]

First Time = $360 – 90 = 270$  (reduced by one quarter)

Second Time = $270 – 90 = 180$

Third Time = $180– 90 = 90$