{"id":10424,"date":"2026-07-15T16:41:27","date_gmt":"2026-07-15T11:11:27","guid":{"rendered":"https:\/\/www.fatakpay.com\/blog\/?p=10424"},"modified":"2026-07-15T18:15:46","modified_gmt":"2026-07-15T12:45:46","slug":"what-is-a-non-performing-asset","status":"publish","type":"post","link":"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/","title":{"rendered":"Understanding Non-Performing Asset (NPA): Full Form, Meaning, and Its Types"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#Introduction\" >Introduction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#What_Is_the_Full_Form_of_NPA\" >What Is the Full Form of NPA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#What_Is_a_Non-Performing_Asset_Meaning\" >What Is a Non-Performing Asset (Meaning)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#The_RBI_90-Day_Rule_for_NPA_Classification\" >The RBI 90-Day Rule for NPA Classification<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#Types_of_NPA\" >Types of NPA<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#Substandard_Assets\" >Substandard Assets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#Doubtful_Assets\" >Doubtful Assets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#Loss_Assets\" >Loss Assets<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#NPA_vs_Gross_NPA_vs_Net_NPA\" >NPA vs Gross NPA vs Net NPA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#Common_Reasons_Loans_Become_NPAs\" >Common Reasons Loans Become NPAs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#Impact_of_NPAs_on_Banks_and_the_Economy\" >Impact of NPAs on Banks and the Economy<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#How_Banks_Manage_and_Recover_NPAs\" >How Banks Manage and Recover NPAs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#Conclusion\" >Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#FAQs_on_NPA\" >FAQs on NPA<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#What_is_the_full_form_of_NPA\" >What is the full form of NPA?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#After_how_many_days_is_a_loan_declared_NPA\" >After how many days is a loan declared NPA?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#What_are_the_three_types_of_NPA\" >What are the three types of NPA?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#What_is_the_difference_between_Gross_NPA_and_Net_NPA\" >What is the difference between Gross NPA and Net NPA?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#What_happens_when_a_loan_becomes_an_NPA\" >What happens when a loan becomes an NPA?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-a-non-performing-asset\/#How_do_banks_recover_NPAs\" >How do banks recover NPAs?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Introduction\"><\/span>Introduction<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Loans are one of the primary income-generating assets for banks, but when borrowers stop repaying them, these assets can become a financial burden. Such loans are known as non-performing assets, and they directly affect the profitability and stability of financial institutions. Understanding what is NPA, how it is classified, and why it matters can help borrowers appreciate the importance of timely repayments while understanding how banks manage credit risk.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Is_the_Full_Form_of_NPA\"><\/span>What Is the Full Form of NPA<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">NPA stands for Non-Performing Asset. In banking, a loan or advance is classified as a non-performing asset when the borrower fails to pay the principal or interest for more than 90 consecutive days. Once an account becomes an NPA, it stops generating income for the bank and requires special monitoring and recovery efforts.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Is_a_Non-Performing_Asset_Meaning\"><\/span>What Is a Non-Performing Asset (Meaning)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A non-performing asset is a loan or advance where the borrower has failed to make scheduled interest or principal repayments for more than 90 days, as prescribed by the Reserve Bank of India (RBI). If you&#8217;re wondering what NPA is in banking, it refers to a loan that has stopped generating income for the lender due to prolonged non-payment.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When a loan becomes an NPA, banks cannot recognize the unpaid interest as income and must make financial provisions to cover potential losses. NPAs can arise from various loan types, including personal loans, home loans, vehicle loans, business loans, and agricultural loans. A high level of NPAs reduces a bank&#8217;s lending capacity and increases financial risk across the banking sector.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_RBI_90-Day_Rule_for_NPA_Classification\"><\/span>The RBI 90-Day Rule for NPA Classification<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">According to RBI prudential norms, a loan account is classified as a Non-Performing Asset (NPA) when the principal or interest remains overdue for more than 90 consecutive days.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, if a personal loan EMI due on 1st January remains unpaid beyond 31st March, the loan may be classified as an NPA. Before reaching this stage, the account generally passes through Special Mention Account (SMA) categories, which act as early warning indicators of financial stress. Once the 90-day threshold is crossed, banks begin higher provisioning, intensify recovery efforts, and classify the account as an NPA in their financial records.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_NPA\"><\/span>Types of NPA<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Banks classify NPAs based on the duration of default and the likelihood of recovering the outstanding amount. Understanding the types of NPA helps explain how lenders assess credit risk and determine recovery strategies.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Substandard_Assets\"><\/span>Substandard Assets<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">These are loan accounts that have remained NPAs for up to 12 months. Recovery is still reasonably possible, although there is an increased credit risk. Banks begin making provisions against these assets to account for potential losses.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Doubtful_Assets\"><\/span>Doubtful Assets<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Loans that continue as NPAs for more than 12 months become doubtful assets. At this stage, recovery becomes increasingly uncertain, and banks must make significantly higher provisions depending on the collateral available.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Loss_Assets\"><\/span>Loss Assets<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Loss assets are loans that have been identified by auditors, RBI inspectors, or the bank itself as largely uncollectible. Although legal recovery efforts may continue, these loans are considered to have little or no recoverable value and require almost complete provisioning.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th><strong>Type of NPA<\/strong><\/th><th><strong>Duration as NPA<\/strong><\/th><th><strong>Recovery Outlook<\/strong><\/th><th><strong>Provisioning Requirement<\/strong><\/th><\/tr><\/thead><tbody><tr><td>Substandard Asset<\/td><td>Up to 12 months<\/td><td>Moderate recovery possibility<\/td><td>Moderate provisioning<\/td><\/tr><tr><td>Doubtful Asset<\/td><td>More than 12 months<\/td><td>Recovery uncertain<\/td><td>Higher provisioning based on secured\/unsecured portion<\/td><\/tr><tr><td>Loss Asset<\/td><td>Considered uncollectible<\/td><td>Very poor recovery prospects<\/td><td>Nearly 100% provisioning<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"NPA_vs_Gross_NPA_vs_Net_NPA\"><\/span>NPA vs Gross NPA vs Net NPA<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th><strong>Term<\/strong><\/th><th><strong>Meaning<\/strong><\/th><\/tr><\/thead><tbody><tr><td><strong>Gross NPA (GNPA)<\/strong><\/td><td>Total value of all loans classified as NPAs before deducting provisions.<\/td><\/tr><tr><td><strong>Net NPA (NNPA)<\/strong><\/td><td>Gross NPA minus provisions made by the bank for expected losses.<\/td><\/tr><tr><td><strong>GNPA Ratio<\/strong><\/td><td>Gross NPAs \u00f7 Total Advances \u00d7 100. Indicates the overall quality of the bank&#8217;s loan portfolio.<\/td><\/tr><tr><td><strong>NNPA Ratio<\/strong><\/td><td>Net NPAs \u00f7 Net Advances \u00d7 100. Reflects the actual financial burden after provisions.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Gross NPA indicates the total problem loans, while Net NPA provides a more realistic picture of the bank&#8217;s remaining credit risk after accounting for provisions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Common_Reasons_Loans_Become_NPAs\"><\/span>Common Reasons Loans Become NPAs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The common reasons for NPA include several borrower-related and economic factors:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Borrowers losing their primary source of income.\u00a0<\/li>\n\n\n\n<li>Business failures leading to cash flow shortages.\u00a0<\/li>\n\n\n\n<li>Economic slowdowns affecting industries and employment.\u00a0<\/li>\n\n\n\n<li>Wilful default despite having repayment capacity.\u00a0<\/li>\n\n\n\n<li>Poor credit appraisal or weak underwriting by lenders.\u00a0<\/li>\n\n\n\n<li>Excessive borrowing beyond repayment capability.\u00a0<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Note: Borrowers with surplus funds should also evaluate the pros and cons of personal loan prepayment. Reducing outstanding debt through timely prepayment can lower repayment pressure and may help prevent a loan from becoming an NPA, provided any applicable foreclosure charges are carefully considered.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Natural disasters or unforeseen events disrupting business operations.\u00a0<\/li>\n\n\n\n<li>Rising interest rates increasing repayment burdens.\u00a0<\/li>\n\n\n\n<li>Fraudulent borrowing or diversion of loan funds.\u00a0<\/li>\n\n\n\n<li>Poor financial planning and irregular cash flow management.\u00a0<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Identifying these common reasons for NPA enables both banks and borrowers to reduce future credit risks.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact_of_NPAs_on_Banks_and_the_Economy\"><\/span>Impact of NPAs on Banks and the Economy<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The impact of non performing asset extends beyond individual banks and affects the broader economy:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Reduces bank profitability because interest income stops.\u00a0<\/li>\n\n\n\n<li>Increases provisioning requirements, lowering available profits.\u00a0<\/li>\n\n\n\n<li>Restricts banks&#8217; ability to issue fresh loans.\u00a0<\/li>\n\n\n\n<li>Raises borrowing costs as lenders become more cautious.\u00a0<\/li>\n\n\n\n<li>Weakens investor confidence in financial institutions.\u00a0<\/li>\n\n\n\n<li>Increases pressure on bank capital adequacy.\u00a0<\/li>\n\n\n\n<li>Slows economic growth due to reduced credit availability.\u00a0<\/li>\n\n\n\n<li>Affects businesses that depend on bank financing.\u00a0<\/li>\n\n\n\n<li>Leads to stricter lending standards for future borrowers.\u00a0<\/li>\n\n\n\n<li>May require government recapitalization of public sector banks in severe cases.\u00a0<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">A high impact of non performing asset ultimately slows economic development by reducing the flow of credit across industries. Once an account is reported as an NPA, the information is shared with credit bureaus. If you notice slight variations in how this is reflected, understanding why credit scores differ across bureaus can help explain differences caused by reporting timelines and individual scoring models.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Banks_Manage_and_Recover_NPAs\"><\/span>How Banks Manage and Recover NPAs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Banks adopt several legal and financial mechanisms to recover NPAs:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Issue reminder notices and negotiate repayment plans.\u00a0<\/li>\n\n\n\n<li>Restructure loans for borrowers facing temporary financial difficulties.\u00a0<\/li>\n\n\n\n<li>Enforce security interests under the <strong>SARFAESI Act, 2002<\/strong> for secured loans.\u00a0<\/li>\n\n\n\n<li>File recovery cases before <strong>Debt Recovery Tribunals (DRTs)<\/strong>.\u00a0<\/li>\n\n\n\n<li>Initiate insolvency proceedings under the <strong>Insolvency and Bankruptcy Code (IBC), 2016)<\/strong> for eligible borrowers.\u00a0<\/li>\n\n\n\n<li>Sell stressed assets to <strong>Asset Reconstruction Companies (ARCs)<\/strong>.\u00a0<\/li>\n\n\n\n<li>Conduct one-time settlement (OTS) schemes where appropriate.\u00a0<\/li>\n\n\n\n<li>Monitor high-risk accounts continuously to prevent further deterioration.\u00a0<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Borrowers should also review their personal loan statement regularly to track EMI payments, outstanding balances, and overdue amounts, helping them identify repayment issues early and avoid their loan slipping into NPA status.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">These recovery methods help banks minimize losses while providing borrowers with opportunities to regularize their accounts.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Understanding what is NPA, the types of NPA, and the impact of non performing asset is essential for both borrowers and lenders. NPAs reduce banks&#8217; profitability, restrict lending capacity, and affect the overall economy. Borrowers can avoid their loans becoming NPAs by making timely repayments, maintaining healthy cash flows, and communicating proactively with lenders whenever financial difficulties arise. Responsible borrowing ultimately benefits both individuals and the financial system.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs_on_NPA\"><\/span>FAQs on NPA<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_full_form_of_NPA\"><\/span>What is the full form of NPA?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">NPA stands for <strong>Non-Performing Asset<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"After_how_many_days_is_a_loan_declared_NPA\"><\/span>After how many days is a loan declared NPA?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A loan is generally classified as an NPA when the principal or interest remains overdue for more than <strong>90 consecutive days<\/strong>, as per RBI guidelines.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_three_types_of_NPA\"><\/span>What are the three types of NPA?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The three types are:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Substandard Assets\u00a0<\/li>\n\n\n\n<li>Doubtful Assets\u00a0<\/li>\n\n\n\n<li>Loss Assets\u00a0<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_difference_between_Gross_NPA_and_Net_NPA\"><\/span>What is the difference between Gross NPA and Net NPA?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Gross NPA is the total value of all bad loans, while Net NPA is the remaining value after deducting provisions made by the bank.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_happens_when_a_loan_becomes_an_NPA\"><\/span>What happens when a loan becomes an NPA?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The bank stops recognizing interest income, increases recovery efforts, makes financial provisions, and may initiate legal proceedings if necessary.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_do_banks_recover_NPAs\"><\/span>How do banks recover NPAs?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Banks recover NPAs through loan restructuring, SARFAESI proceedings, Debt Recovery Tribunals (DRTs), Insolvency and Bankruptcy Code (IBC), Asset Reconstruction Companies (ARCs), and negotiated settlements where appropriate.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Introduction Loans are one of the primary income-generating assets for banks, but when borrowers stop repaying them, these assets can become a financial burden. Such loans are known as non-performing assets, and they directly affect the profitability and stability of financial institutions. Understanding what is NPA, how it is classified, and why it matters can<\/p>\n","protected":false},"author":1,"featured_media":10443,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[180],"tags":[],"class_list":["post-10424","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-loan"],"_links":{"self":[{"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/posts\/10424","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/comments?post=10424"}],"version-history":[{"count":1,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/posts\/10424\/revisions"}],"predecessor-version":[{"id":10425,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/posts\/10424\/revisions\/10425"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/media\/10443"}],"wp:attachment":[{"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/media?parent=10424"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/categories?post=10424"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/tags?post=10424"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}