What is a Standard Asset?

By meenakshi|Updated : August 9th, 2022

The standard asset is a type of non-performing asset that doesn’t disclose any problems nor has any risk except the normal business risk. With respect to the standard asset, no payment of interest is perceived. Also, there is no default in repayment of principal.

Types of Non-performing Assets

The asset in which the principal or the interest amount is low or does not have to be paid. In other words, the receiver is unable to pay the loan back, or the loan agreement is broken. The non-performing assets are of the following types-

  • Standard Assets- The standard asset is a kind of asset that is NPA in the real sense but carries a normal risk associated with the business. It creates continuous income when they become due.
  • Sub-Standard Assets- Those assets (advances and loans) that are non-performing for a span of 12 months are categorized as Sub-Standard Assets.
  • Doubtful Assets- Those assets that are non-performing for more than 12 months are known as Doubtful Assets.
  • Loss Assets- Loss assets are those assets that cannot be recovered by the lending institution. 

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FAQs on standard asset

  • The asset that doesn’t have any risk rather than the risk associated with the business is called the Standard Assets.

  • Standard assets mean cash, cash funds, deposits, exchange-traded commodities, government and local authority bonds and other fixed interest stocks.

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