Non-Performing Assets (NPA) | Types | Classification of NPA for Banks

In this video on Non-Performing Assets (NPA), here we discuss top NPA types and its classifications in banks.

𝐖𝐡𝐚𝐭 𝐢𝐬 𝐍𝐨𝐧-𝐏𝐞𝐫𝐟𝐨𝐫𝐦𝐢𝐧𝐠 𝐀𝐬𝐬𝐞𝐭𝐬 (𝐍𝐏𝐀)?
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Non-Performing Assets refers to classification of loans and advances in a lender's books in which no interest and principal payments have been obtained and are "past due."

𝐓𝐲𝐩𝐞𝐬 𝐨𝐟 𝐍𝐨𝐧-𝐏𝐞𝐫𝐟𝐨𝐫𝐦𝐢𝐧𝐠 𝐀𝐬𝐬𝐞𝐭𝐬 (𝐍𝐏𝐀)
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#1 - Term Loans
#2 - Cash Credit and Overdraft
#3 - Agricultural Advances

𝐂𝐚𝐭𝐞𝐠𝐨𝐫𝐲 𝐨𝐟 𝐍𝐏𝐀 𝐟𝐨𝐫 𝐁𝐚𝐧𝐤𝐬
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#1 - Standard Assets

Standard assets are those assets that have remained non-performing assets for 12 months or less and the risk of the asset is normal.

#2 - Sub- Standard Assets

Non-performing assets are classified as sub-standard assets for a period of more than 12 months.

#3 - Doubtful Debts

Non-performing assets fall under the category of Doubtful Debts for a period exceeding 18 months.

#4 - Loss Assets

The final classification of non-performing assets is loss assets if the loan was found either by bank itself or by an external auditor or internal auditor that it is not possible to collect the loan amount.

To know more about 𝐍𝐨𝐧-𝐏𝐞𝐫𝐟𝐨𝐫𝐦𝐢𝐧𝐠 𝐀𝐬𝐬𝐞𝐭𝐬 (𝐍𝐏𝐀), you can go to this 𝐥𝐢𝐧𝐤 𝐡𝐞𝐫𝐞:- https://www.wallstreetmojo.com/non-pe...

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