- Definition: NPAs are assets (loans) for which interest and/or principal payments have remained overdue for more than 90 days.
- Impact on Categorization:
- NPAs are a key category of stressed assets.
- Loans are classified as standard or non-performing based on payment status.
- Once a loan becomes an NPA, it requires higher provisioning by banks.
- This affects the bank’s capital adequacy ratio.
- Restructured loans, though modified, are also indicative of past NPAs.