NPA

NPA stands for Non-Performing Asset.

The RBI classifies a loan as an NPA when the interest or principal payment is overdue for more than 90 days. Banks must stop accruing interest on NPAs, set aside provisions from profits, and either recover or write them off. NPAs are a key indicator of asset quality and lending health, and they directly impact a bank's profitability, capital adequacy, and lending capacity.