Money and banking

Indian Economic System(RAS)

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Indian Economy - Understanding the basics of Indian economic system

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Consider the following statements

A loan loss provision is a cash reserve that banks set aside to cover losses incurred from defaulted loans.
The level of loan loss provision is determined based on the level expected to protect the safety and soundness of the bank.

Select the correct statement.

1 only

2 only

Both

None

Explanation:

A loan loss provision is a cash reserve that banks set aside to cover losses incurred from defaulted loans. The level of loan loss provision is determined based on the level expected to protect the safety and soundness of the bank. Hence both statements are correct.

By: Shubham Tiwari

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