The principal payment/interest remains overdue for a term loan continuously for more than 90 days.
- The account's Cash Credit/Overdraft (CC/OD) portion is "out of service."
- Billing that is overdue by 90 days.
- The principal or interest payment would not be made for two harvest seasons for crops that only grow for a short time.
- In the case of long-lived crops, the payment of interest or principal is past due for a crop season.
- The quantity of cash that has been outstanding for a continuous 90 days.
Different Types of NPAs
The various forms of NPA include:
- An NPA that is past due by less than or equal to 12 months is known as a non-standard NPA.
- Doubtful NPA: This NPA is classified as a Substandard NPA for 12 months or less.
- Non-performing assets: According to a review by the Reserve Bank of India, non-performing assets (NPAs) are when an NPA has been acknowledged as a loss incurred by a bank or financial institution (RBI).
How do banks handle NPA?
To handle NPA, banks employ several strategies, such as debt collection tribunals, asset reconstruction, and Lok Adalats.