UPSC Prelims Practice Questions — National Asset Reconstruction Company Limited (NARCL) Strengthens India’s Stressed Asset Resolution Framework, Accelerates Recoveries in FY 2025–26

Question 1

Which one of the following banks has been designated as the Sponsor of the National Asset Reconstruction Company Limited (NARCL), holding shareholding of up to about 12 per cent?

Accepted Answer

Canara Bank

Answer

State Bank of India

Answer

Punjab National Bank

Answer

Bank of Baroda

Question 2

NARCL is registered by the Reserve Bank of India as an Asset Reconstruction Company under which Section number of the SARFAESI Act, 2002?

Accepted Answer

Section 3

Answer

Section 9

Answer

Section 13

Answer

Section 15

Question 3

As an Asset Reconstruction Company, NARCL functions under the direct regulatory oversight of which one of the following?

Accepted Answer

Reserve Bank of India (RBI)

Answer

Securities and Exchange Board of India (SEBI)

Answer

Ministry of Corporate Affairs

Answer

Insolvency and Bankruptcy Board of India (IBBI)

Question 4

The Central Government guarantee backing NARCL's Security Receipts can be invoked only upon the occurrence of which one of the following events?

Accepted Answer

Resolution or liquidation of the underlying borrower account

Answer

Acquisition of the stressed asset by NARCL

Answer

Classification of the loan as a non-performing asset by the selling bank

Answer

Automatic lapse of the guarantee at the end of its fifth year

Question 5

Among the following mechanisms in India's stressed-asset resolution landscape, which one is the earliest statutory framework that empowered secured creditors to enforce security interests without the intervention of courts or tribunals?

Accepted Answer

SARFAESI Act, 2002

Answer

Strategic Debt Restructuring (SDR) Scheme, 2015

Answer

Insolvency and Bankruptcy Code, 2016

Answer

RBI Prudential Framework for Resolution of Stressed Assets, 2019

Question 6

NARCL is progressing towards a targeted aggregate acquisition of stressed assets amounting to approximately which one of the following?

Accepted Answer

₹2 lakh crore

Answer

₹1.65 lakh crore

Answer

₹30,600 crore

Answer

₹6,345 crore

Question 7

The 'Bad Bank' architecture announced in the Union Budget 2021-22 and operationalised through NARCL is administered at the Union level by which one of the following?

Accepted Answer

Department of Financial Services, Ministry of Finance

Answer

Department of Economic Affairs, Ministry of Finance

Answer

Ministry of Corporate Affairs

Answer

NITI Aayog

UPSC Prelims Practice Questions — National Asset Reconstruction Company Limited (NARCL) Strengthens India’s Stressed Asset Resolution Framework, Accelerates Recoveries in FY 2025–26

Q1. Which one of the following banks has been designated as the Sponsor of the National Asset Reconstruction Company Limited (NARCL), holding shareholding of up to about 12 per cent?

Q2. NARCL is registered by the Reserve Bank of India as an Asset Reconstruction Company under which Section number of the SARFAESI Act, 2002?

Q3. As an Asset Reconstruction Company, NARCL functions under the direct regulatory oversight of which one of the following?

Q4. The Central Government guarantee backing NARCL's Security Receipts can be invoked only upon the occurrence of which one of the following events?

Q5. Among the following mechanisms in India's stressed-asset resolution landscape, which one is the earliest statutory framework that empowered secured creditors to enforce security interests without the intervention of courts or tribunals?

Q6. NARCL is progressing towards a targeted aggregate acquisition of stressed assets amounting to approximately which one of the following?

Q7. The 'Bad Bank' architecture announced in the Union Budget 2021-22 and operationalised through NARCL is administered at the Union level by which one of the following?