In the context of asset classification by banks, what is an 'Asset' termed when it has remained a Non-Performing Asset (NPA) for a period exceeding 12 months up to 3 years?

💡 Solution & Explanation

Under Reserve Bank of India asset classification norms, a loan is categorized as a doubtful asset when it has remained in the sub-standard category for a period exceeding 12 months. Sub-standard assets refer to loans overdue for less than 12 months, whereas loss assets are uncollectible loans identified by auditors or inspectors. These classifications dictate the provisioning requirements that commercial banks must maintain.