Reserve Bank of India defines NPAas any advance or loan that is overdue for more than 90 days.
What are Non-performing loans or assets?
- Reserve Bank of India defines NPAas any advance or loan that is overdue for more than 90 days.
- An asset becomes non-performing when it ceases to generate income for the bank.
Why it is getting increased?
- Much of this is due to the six-month loan moratorium.
- Supreme Court ruling barring banks from classifying any borrower as a non performing asset
What the banks are doing to curb it?
- Banks are restructuring it.
- Banks and non-bank financial companies (NBFCs) have also been strengthening their balance sheets and bolstering their equity bases.
- Banks have also been building reserves and creating excess COVID provisions.
