Gross non-performing assets (GNPA)

The gross non-performing assets (GNPA) of banks are set to improve further upto 2.1 per cent by the end of the Financial Year 2025, as per a report.

What is a Non-Performing Asset?

• They are loans or advances that are in default or in arrears.
• In other words, these are those kinds of loans wherein principal or interest amounts are late or have not been paid.
• Classification: Non-Performing Assets are basically Non-Performing Loans. In India, the timeline given for classifying the asset as NPA is 180 days. As against 45 to 90 days of international norms.

Types of NPA:

• Standard Assets: It is a kind of performing asset which creates continuous income and repayments as and when they become due. These assets carry a normal risk and are not NPA in the real sense of the word. Hence, no special provisions are required for standard assets.
• Sub-Standard Assets: Loans and advances which are non-performing assets for a period of 12 months fall under the category of Sub-Standard Assets.
• Doubtful Assets: The Assets considered as non-performing for a period of more than 12 months are known as Doubtful Assets.
• Loss Assets: All those assets which cannot be recovered by the lending institutions are known as Loss Assets.