You can keep in mind that for a bank, the loan given by the bank is considered as its assets, so if the services are not being provided for both elements of loan or loan or both or both, then it is a Will be considered as a non-performing asset (NPA). Any asset that prevents giving returns to its investors for a certain period, known as non-performing assets (NPAs). Normally, the specified period of time in most countries and various lending institutions is 90 days. However, this is not a thumb rule and it may vary with the financial institution and the terms and conditions accepted by the borrower.

Categories of Non-Performing Assets (NPAs)

Based upon the period to which a loan has remained as NPA, it is classified into 3 types:

Substandard Assets- An asset which remains as NPAs for less than or equal to 12 months.

 Doubtful Assets- An asset which remained in the above category for 12 months.

Loss Assets- Asset where loss has been identified by the bank or the RBI, however, there may be some value remaining in it. Therefore loan has not been not completely written off.

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