Forms of NPA

You tried all sorts of ways to raise your finance and you did use your connection but it didn’t work out and that is quite a scary place to be in. Now if you took a loan and you can’t pay it back in the standard number of days, the lenders and the financial institutions consider that loan as Non- Performing Assets. Non -Performing Assets can be also be known as Non- Performing Loans.

NPA has various sorts and forms of it and here is a list of it that maybe your asset falls under.

Standard Assets- Sometimes you can pay your loan but the repayment of it is not consistent and you fail to repay the lender on time. It is still considered a performing asset and that’s why there are no special provisions that are made for this type of asset. In the real business world, they are not even considered as an NPA.

Sub-Standard Assets- In this category, when the loan is not repaid in 12 months, the standard asset is then considered as the sub-standard asset and in this case.

Doubtful Asset- This loan is over 12 months and if you still can’t pay it back, then the asset automatically gets converted into a doubtful asset from a sub-standard asset.

Loss Assets- The period of repaying even when the bank has given up and finally, they take the decision of rendering the asset as a loss. The auditors and the central bank inspectors have to analyse the situation and the amount is then written off, wholly or partly.

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