Which of the following refers to 'Non-Performing Assets (NPAs)' in the Indian banking system?

💡 Solution & Explanation

Non-Performing Assets are loans or advances where interest or principal installments remain overdue for a period exceeding 90 days, as per Reserve Bank of India prudential norms. Banks classify these assets into sub-standard, doubtful, or loss categories based on the duration of default and security coverage. This classification ensures accurate financial health reporting and compels institutions to provision capital against potential credit losses. Operational losses of branches or short-term administrative delays do not constitute NPAs.