[Solved] Which of the following statements about Non-Performing Assets (NPAs) is correct? — Ans: NPAs are loans on which interest or principal remains overdue for more than 90... | Financial Awareness

Financial Awareness - Risk, Stability & Emerging Finance

Which of the following statements about Non-Performing Assets (NPAs) is correct?

ANPAs refer to loans fully repaid by the borrower

BNPAs are loans on which interest or principal remains overdue for more than 90 days

CNPAs are loans that have been fully written off by the bank

DNPAs are loans given only to priority sectors

Step-by-Step Solution

Step 1: Understand NPA definition
Non-Performing Assets are loans or advances where interest or principal remains overdue for a specified period, typically 90 days.
Step 2: Analyze options
Loans fully repaid are not NPAs; written-off loans are after classification as NPAs; NPAs are not restricted to priority sectors only. The correct definition matches overdue period.
Final Answer:
NPAs are loans on which interest or principal remains overdue for more than 90 days → Option B
Quick Check:
NPA = overdue loan > 90 days ✅

Quick Trick: Remember 90 days overdue defines NPA.

Common Mistakes:

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