The full form of NPA is Non Performing Assets. An NPA is a loan or advance where the interest or principal payment has been overdue for at least ninety days. This timeframe is standard, and these types of loans are also known as bad loans.
Examples of NPAs:
- A home loan where the borrower has missed payments for over 90 days.
- A business loan where the borrower has not made any payments for more than 3 months.
- A personal loan where the borrower has stopped making payments for over 90 days.
NPAs are a significant concern for banks and financial institutions as they represent a potential loss of money.
