What is the legal basis for Non-Performing Asset (NPA) in Indian law?

Non-Performing Asset (NPA) is defined or referenced in: RBI Prudential Norms on Income Recognition, Asset Classification and Provisioning (IRACP).

BankingLegal Dictionary

Non-Performing Asset (NPA)

RBI Prudential Norms on Income Recognition, Asset Classification and Provisioning (IRACP)

Definition

A loan or advance where interest or principal payment has been overdue for more than 90 days. NPAs are classified as Sub-Standard (up to 12 months NPA), Doubtful (12–36 months), or Loss Assets (recovery unlikely). RBI's Prudential Norms require banks to make provisions against NPAs. SARFAESI enforcement can only be initiated after an account is classified as NPA.

Related Terms

SARFAESI

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, …

Sub-Standard AssetDoubtful AssetProvisioning

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