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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.

1. $45$
2. $90$
3. $135$
4. $180$
Migrated from GO Electrical 1 year ago by Arjun

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 = $180– 90 = 90$

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