With reference to Economy which of the following best represents the term 39 Slippage Ratio 39 ........

Economic Affairs Types of Banks and Banking

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With reference to Economy, which of the following best represents the term 'Slippage Ratio'?

It is the ratio of the current assets of a bank or company to its current liabilities.

It is the ratio of net income to the number of shares outstanding for a company

It is the ratio of quick assets such as cash, marketable securities etc. to current liabilities

It is the ratio of fresh NPAs as percentage of standard advances at the beginning of the quarter.

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Explanation:

Option A is Current Ratio or the Working Capital Ratio.

Option B is Earning Per Share Ratio where as Option C is quick ratio.

Option D perfectly defines the term 'Slippage Ratio'. Slippage ratio is defined as the ratio of fresh accretion to NPLs during the year to standard advances at the beginning of the year. The ratio of slippages plus restructured standard advances to recoveries (excluding up-gradations) also showed a rising trend signalling the need for proactive management of NPAs.