An NPA is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days.
Classification of Assets: As per the RBI guideline, banks are required to classify NPAs further into:
- Substandard Assets: Assets that have remained NPA for a period of less than or equal to 12 months.
- Doubtful Assets: An asset that has remained in the substandard category for a period of 12 months.
- Loss Assets: It is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted, although there may be some recovery value.
Source: The Hindu