Unsourced material may be challenged and removed. In simple terms, an asset is tagged as non performing when it ceases to generate income for the lender. Once the borrower has management of non performing assets pdf to make interest or principal payments for 90 days the loan is considered to be a non-performing asset. Non-performing assets are problematic for financial institutions since they depend on interest payments for income.
Troublesome pressure from the economy can lead to a sharp increase in NPLs and often results in massive write-downs. 90 days’ overdue’ norm for identification of NPA, from the year ending March 31, 2004. 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. Sub-standard assets: a sub standard asset is one which has been classified as NPA for a period not exceeding 12 months.