NPA Full Form - Non Performing Assets

What is the full form of NPA?

The full form of NPA is Non Performing Assets. NPA is a mortgage or advance in respect of which the interest or principal payment has been overdue for ninety days. This 90 Days duration is the standard time frame. Such NPA is also called bad loans. The Non-Performing Asset generally refers to the mortgage or credit of a bank borrower for which one or more payments have been due for a long time. Today, it is considered a ‘non-performing asset’ legally because the “asset” has prevented the Bank from operating or generating any income.

NPA types

NPA is Classified into specific groups. NPA is characterized according to the status of the repayment. Based on the record of an asset or default time frame or risk factor, we can divide the NPAs as below.

Standard Assets

Standard assets are the ones with the lowest risk. They carry a low risk, as per bank regulations. These assets are also in the Bank’s position to generate some profits. These are all the sorts of assets where the borrower seeks to make unpredictable and rarely the-time payments.

Substandard Assets

Sub-Standard Assets are Assets that’s been in the NPA group for 365 days or more.

Doubtful Assets

Doubtful assets have ‘non-performed’ for more than 365 days. Consequently, they can be said to bring a ‘more than normal risk, and the lender needs to pay special attention.

Loss Assets

Although there may be some salvage or recovery value, according to the RBI, loss assets are deemed uncollectible and of so little value that their continued existence as bankable assets is not warranted.

Reasons for NPA

  • The nonpayment or default borrowers.
  • Natural disasters, political justifications, or other factors are responsible for the poor business landscape.
  • The loan is made available to lenders whose credit background is poor.


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