Under the Insolvency and Bankruptcy Code, which is the adjudicating authority for the insolvency of a company?

The correct answer is C, 90 days. Under the Reserve Bank's prudential norms on income recognition and asset classification, an asset stops being a performing asset when interest or an instalment of principal remains overdue for more than ninety days, and the bank must then stop treating the interest as income and start making provisions. Option A is wrong; thirty days of overdue status only puts the account in the special mention category, an early warning stage, not in the NPA class. Option B is wrong for the same reason, sixty days being another special mention stage. Option D is wrong because 180 days was the older standard, used before 2004, and papers often keep it as the distractor for candidates who have learnt the rule from an old book. For crop loans the test is in crop seasons instead of days.

The correct answer is B, a sub-standard asset. The classification runs in a sequence: an account that has just become non-performing is sub-standard for the first twelve months, after which it becomes doubtful, and it is called a loss asset when recovery is no longer expected. Option A is wrong because a standard asset is one where repayment is regular and which carries no more than normal risk, so it is not an NPA at all. Option C is wrong because an asset becomes doubtful only after it has stayed sub-standard for more than twelve months, and the doubtful class is itself divided by age for provisioning. Option D is wrong because a loss asset is one identified as irrecoverable by the bank, its internal auditors or the Reserve Bank inspection, though some salvage value may remain.

The correct answer is C, 2016. The Code was passed in 2016 on the recommendations of the Bankruptcy Law Reforms Committee and replaced a scatter of older laws, among them the Sick Industrial Companies Act and parts of the Companies Act, with a single time-bound process in which control passes from the defaulting promoter to the creditors. Option A is wrong because 2002 is the year of the SARFAESI Act, which deals with enforcement of security rather than with insolvency as a whole. Option B is wrong because 2013 is the year of the Companies Act, under which the National Company Law Tribunal itself was provided for. Option D is wrong because 2019 saw only amendments, including the outer limit of 330 days for the resolution process, not the enactment of the Code.

The correct answer is C, the Insolvency and Bankruptcy Board of India. Created under the Code of 2016, it registers and oversees insolvency professionals, insolvency professional agencies and information utilities, and makes the regulations under which the resolution process runs, which makes it both a regulator and a rule-maker. Option A is wrong because the Reserve Bank regulates banks and may direct them to refer accounts for insolvency, but it does not regulate insolvency professionals. Option B is wrong because the Securities and Exchange Board of India regulates the securities market. Option D is wrong because the Code is administered by the Ministry of Corporate Affairs rather than the Ministry of Finance, and in any case a ministry is not the statutory regulator here. Remember the pair: the Ministry of Corporate Affairs administers the Code and the Board is its statutory regulator, while the Reserve Bank stays the regulator of the banks that file the cases.

The correct answer is C, 330 days. Section 12 of the Code gives the resolution process 180 days from the date of admission, allows the adjudicating authority to extend it once by up to 90 days on a resolution of the Committee of Creditors, and the amendment of 2019 added the outer limit of 330 days, which includes any time spent in litigation and in extensions. Option A is wrong because 180 days is only the first period, before any extension. Option B is wrong because 270 days, that is 180 plus 90, was the limit before the 2019 amendment, and papers keep it as the distractor for candidates working from older notes. Option D is wrong because the Code counts the outer limit as 330 days and not as a year. If no plan is approved within the limit, the company goes into liquidation.