Full formBanking & Finance
NPAstands forNon-Performing Asset
Full Form of NPA
What is NPA?
A Non-Performing Asset (NPA) refers to a loan or advance where the borrower has stopped making interest or principal payments for a specified period, typically 90 days in India. In the Indian banking system, NPAs are a critical indicator of asset quality and financial health. Banks are required to classify assets as NPA if the repayment is overdue beyond the stipulated period as per Reserve Bank of India (RBI) guidelines. NPAs erode bank profitability because they require provisioning, which reduces net income and capital adequacy. The Indian government and RBI have implemented various measures such as the Insolvency and Bankruptcy Code (IBC) and asset reconstruction to tackle the high NPA levels in public sector banks. NPAs are a major topic in banking awareness sections of competitive exams like IBPS, SBI PO, and RBI Grade B, where candidates must understand classification, provisioning norms, and impact on the economy. The concept is also relevant for financial analysts and policymakers monitoring the stability of the banking sector.
NPA का फुल फॉर्म
गैर-निष्पादित परिसंपत्ति
Example
The bank's rising NPAs have prompted RBI to tighten lending norms and initiate prompt corrective action.
NPA — frequently asked questions
What is the full form of NPA?
NPA stands for Non-Performing Asset, which is a loan or advance that is in default or arrears of principal or interest payments for more than 90 days.
What is the impact of NPAs on Indian banks?
High NPAs reduce bank profitability, force higher provisioning, lower capital adequacy, and restrict the bank's ability to lend, ultimately affecting the overall economy.
How is NPA classified in India?
As per RBI norms, an asset is classified as NPA if interest or principal remains overdue for more than 90 days. Further sub-classifications include substandard, doubtful, and loss assets.