NPA Criteria
A Non-performing asset (NPA) is defined as a credit facility in respect of which the interest and/or instalment of finance principal has remained ‘past due’ for a specified period of time. NPA is used by financial institutions that refer to loans that are in jeopardy of default. Once the borrower has failed to make interest or principle payments for 90 days the loan is considered to be a non-performing asset. Accordingly, with effect from March 31, 2004, a non-performing asset (NPA ) is a loan or an advance where;
Interest and/or instalment of principal remain overdue for a period of more than 91 days in respect of a term loan,
The account remains ‘out of order’ for a period of more than 90 days, in respect of an Overdraft/Cash Credit (OD/CC),
The bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted,
Interest and/or instalment of principal remains overdue for two harvest seasons but for a period not exceeding two half years in the case of an advance granted for agricultural purposes,
Any amount to be received remains overdue for a period of more than 90 days in respect of other accounts.
Non submission of Stock Statements for 3 Continuous Quarters in case of Cash Credit Facility.
No active transactions in the account (Cash Credit/Over Draft/EPC/PCFC) for more than 91days