Economics • Banking & FinanceEasy
Which of the following best describes 'Non-Performing Assets (NPAs)' in the Indian banking system?
A. Loans or advances where interest and/or installment of principal remain overdue for a period of more than 90 days.✓ Correct Answer
B. Investment portfolios of banks that have suffered permanent capital losses due to stock market crashes.
C. Government securities that fail to yield interest payments on maturity dates.
D. Foreign currency accounts frozen due to regulatory compliance failures.
💡 Solution & Explanation
A non-performing asset is defined as a loan or credit advance where interest or principal installments remain overdue for a period exceeding 90 days in respect of standard commercial credit facilities. Assets failing to generate returns due to ninety-day delinquency lose income-earning status for banks.
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