An asset becomes non-performing when it ceases to generate income for the bank. A ‘non performing asset’ (NPA) was defined as a credit facility in respect of which the interest and/ or installment of principal has remained ‘past due’ for a specified period of time.
The important assets of banks are:
The NPA deals with loans and Advances.
A non-performing asset (NPA) is a loan or an advance where:
Banks are required to classify nonperforming assets into the following three categories based on the period for which the asset has remained non-performing and the realisability of the dues:
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