A Non-Performing Asset is an asset that does not produce income, such as a loan in which the borrower is not making payments.

Non-performing assets (NPAs) are typically loans or advances that are in default or arrears, impacting a bank`s profitability and financial health.

What is a non-performing asset? A non-performing asset (NPA) is an asset that ceases to generate income, often due to the borrower failing to make scheduled payments for a specified period.

What is an example of NPA? An example of an NPA is a mortgage loan where the borrower has not made payments for 90 days or more, causing the loan to be classified as non-performing.

What is the difference between NPA and NPL? NPA (Non-Performing Asset) and NPL (Non-Performing Loan) are often used interchangeably, but NPA can refer to any non-income-generating asset, while NPL specifically refers to loans that are not performing.

Monitoring NPAs helps financial institutions assess credit risk, improve asset quality, and take corrective actions to mitigate potential losses.

Non-performing assets represent significant financial risks for lenders, and effective management of NPAs is crucial for maintaining financial stability and profitability.