Multiple choice

NPA is a classification used by financial institutions. It refers to loans that are in jeopardy of default. With effect from March 31, 2004, a non-performing asset (NPA) is deemed to be a loan or an advance where the account remains ‘out of order’ for a period of more than ____, in respect of an overdraft/cash credit.

  1. 30 days

  2. 45 days

  3. 60 days

  4. 90 days
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D Correct answer
Explanation

NPA is a classification used by financial institutions. It refers to loans that are in jeopardy of default. With effect from March 31, 2004, a non-performing asset (NPA) is deemed to be a loan or an advance where the account remains ‘out of order’ for a period of more than 90 days, in respect of an overdraft/cash credit.

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