NPA-Non Performing Assets

According to RBI regulations, if a borrower defaults on principal or interest payments for ninety days or longer, the loan is considered a non-performing asset. Cash credit, overdraft facilities, term loans, and other forms of advances are all subject to this regulation. NPAs are not just found in business loans. They also cover loans made to small firms, individuals, and other organizations. A measure used in banking to show how much provision a bank has set aside for bad loans relative to the overall number of non-performing assets (NPAs) is called the Provisioning Coverage Ratio. A higher PCR lowers the risk of financial stability by indicating that the bank has made sufficient provisions for its non-performing assets.