Non-Performing Assets (NPA) - Meaning Non-Performing Assets are popularly known as NPA. Commercial Banksassets are of various types.

All those assets which generate perio ical income are calle as Performing Assets (PA). !hile all those assets which o not generate perio ical income are calle asNonPerforming Assets (NPA). "f the customers o not repay principal amount an interest for a certain perio of time then such loans #ecome non-performing assets (NPA). $hus non-performing assets are #asically non-performing loans. "n "n ia% the time frame given for classifying the asset as NPA is &'( ays as compare to )* ays to +( ays of international norms. "mage Cre its , mono-ussi. "n ia an NonPerforming Assets "n "n ia% NPA were very high in the #eginning of +(.s. /ver a perio of time there is consi era#le ecline in the NPA.s of all #anks. "n the case of pu#lic sector #anks% gross non-performing assets were +.)0 in 1((1-(2 an it ecline to 3.'0 in 1((2-(). $he net NPA uring the same perio ecline from ).*0 to 20. $ypes of NPA NPA have #een ivi e or classifie into following four types45tan ar Assets 4 A stan ar asset is a performing asset. 5tan ar assets generate continuous income an repayments as an when they fall ue. 5uch assets carry a normal risk an are not NPA in the real sense. 5o% no special provisions are re6uire for 5tan ar Assets. 5u#-5tan ar Assets 4 All those assets (loans an a vances) which are consi ere as nonperforming for a perio of &1 months are calle as 5u#-5tan ar assets. 7ou#tful Assets 4 All those assets which are consi ere as non-performing for perio of more than &1 months are calle as 7ou#tful Assets. 8oss Assets 4 All those assets which cannot #e recovere are calle as 8oss Assets. $hese assets can #e i entifie #y the Central Bank or #y the Au itors.

Provision on types of assets Provision is allocating money every year to meet possi#le future loss.

Causes of NPA NPA arises ue to a num#er of factors or causes like45peculation 4 "nvesting in high risk assets to earn high income. 7efault 4 !illful efault #y the #orrowers. 9rau ulent practices 4 9rau ulent Practices like a vancing loans to ineligi#le persons% a vances without security or references% etc. 7iversion of fun s 4 Most of the fun s are iverte for unnecessary e:pansion an iversion of #usiness. "nternal reasons 4 Many internal reasons like inefficient management% inappropriate technology% la#our pro#lems% marketing failure% etc. resulting in poor performance of the companies. ;:ternal reasons 4 ;:ternal reasons like a recession in the economy% infrastructural pro#lems% price rise% elay in release of sanctione limits #y #anks% elays in settlements of payments #y government% natural calamities% etc.