BANKING AFFAIRS

Detailed explanation-1: -When customers, retail or corporates, are not able to pay the interest, the asset becomes ‘non-performing’ for the bank because it is not earning anything for the bank. Therefore RBI has defined NPAs as assets that stop generating income for them.

Detailed explanation-2: -Definition: A non performing asset (NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days. Description: Banks are required to classify NPAs further into Substandard, Doubtful and Loss assets. 1.

Detailed explanation-3: -NPA Question 1 Detailed Solution NPA as defined by the RBI, “if for a period of more than 90 days, the interest or installment amount is overdue then that loan account can be termed as a Non-Performing Asset.

Detailed explanation-4: -A nonperforming asset (NPA) refers to a classification for loans or advances that are in default or in arrears. A loan is in arrears when principal or interest payments are late or missed. A loan is in default when the lender considers the loan agreement to be broken and the debtor is unable to meet his obligations.

Detailed explanation-5: -NPA full form is Non-performing Assets. NPA is nothing but the loans that are being given by the Indian banks and other operating financial institutions whose interests as well as the principal amounts have been in a state of overdue status for a fairly long time.