Which of the following is a characteristic of the 'Liquidity Coverage Ratio' under Basel III?
A. It measures only long-term funding stability
B. It applies only to non-bank financial institutions
C. It requires banks to hold sufficient high-quality liquid assets to cover net cash outflows over 30 days
D. It is related only to capital adequacy
Answer: Option C
Solution (By JKSSB Mock Tests)
The Liquidity Coverage Ratio (LCR) requires banks to maintain an adequate stock of unencumbered high-quality liquid assets that can be converted into cash to meet liquidity needs for a 30-calendar-day stress scenario.
Explanation:
An NPA is a loan or advance where interest or principal remains overdue for a period of more than 90 days (as per RBI norms for term loans).
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