Pooja Otwani

A nonperforming asset (NPA) refers to a classification for loans or advances in default or arrears. A loan is in arrears when principal or interest payments are late or missed. A loan is in default when the lender considers the loan agreement to be broken and the debtor cannot meet his obligations. A nonperforming asset (NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days. NPAs can be classified as standard assets, substandard assets, doubtful assets, or loss assets, depending on the length of time overdue and probability of repayment.