Question

Write a short essay on npa in 250 words

Answer 1

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Found a suitable answer :

NPA

Full Form : Non-profit performing Assets

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. Substandard assets: Assets which has remained NPA for a period less than or equal to 12 months.

2. Doubtful assets: An asset would be classified as doubtful if it has remained in the substandard category for a period of 12 months.

3. Loss assets: As per RBI, “Loss asset is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted, although there may be some salvage or recovery value.”

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Answer 2

NPA is the Non - Performing Asset.

Explanation:

The Non-Performing Asset is a type of loan in which the person does not need to pay the interest of the principal which is given to him as a loan for around 90 days.

It is basically divided into three types. They are:

• Substandard Asset
• Doubtful Asset
• Loss Asset

These assets depends upon a certain period of time which is 12 months.