BANKING AFFAIRS

Detailed explanation-1: -In general, loans become NPAs when they are outstanding for 90 days or more, though some lenders use a shorter window in considering a loan or advance past due. A loan is classified as a non-performing asset when it is not being repaid by the borrower.

Detailed explanation-2: -loans and advances means any direct or indirect advance of funds (including obligations as maker or endorser arising from discounting of commercial/business paper) which are made to a person on the basis of an obligation to repay the funds. “Loans and advances” also includes all exposures as defined in the Act.

Detailed explanation-3: -short term loans and advances are current assets because loans. Advances on asset side are those advances which are paid for now but realize at future date. so it is an assets to the company. And Loan on assets side ate those loans which are given by the company and to be recovered in future with interest.

Detailed explanation-4: -Loans refer to a debt provided by a financial institution for a particular period while Advances are the funds provided by the banks to the business to fulfill working capital requirement which are to be payable within one year.