Question

315 October
Asset which ceases income of a bank for two consecutive quarter
is called as​

Answer 1

1 An asset, including a leased asset, becomes non performing when it ceases to generate income for the bank. ... 2 A non performing asset (NPA) is a loan or an advance where; i. interest and/ or instalment of principal remain overdue for a period of more than 90 days in respect of a term loan

Answer 2

Answer:

NPA is the asset that ceases the income of a bank for two consecutive quarters.

Step-by-step explanation:

Definition: A loan or advance for which the principal or interest payment was past due for 90 days refer to as a non-performing asset (NPA).

• Banks must further categorize non-performing assets (NPAs) into Substandard, Doubtful, and Loss assets.

• 1. Substandard assets that have been NPA for less than or equal to 12 months.
• 2. Doubtful Assets: An asset deemed questionable if it has stayed in the subpar category for a continuous 12-month period.
• 3. Loss assets: According to the RBI, a loss asset is "considered uncollectible and of such little value that its continuation as a bankable asset is not merited," even though it may have some salvage or recovery potential.

Hence, an Asset that ceases the income of a bank for two consecutive quarters is called a non-performing asset.

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