Non Performing Assets - Free Essay Examples and Topic Ideas

Non-performing assets (NPAs) are loans or advances that are in default, meaning the borrower has not repaid the principal or interest amount for a specified period of time. NPAs are considered a liability for banks and financial institutions because they cannot generate any income from them. These assets can result in huge losses for banks and impact their financial health. NPAs may arise due to various reasons like the borrower’s financial distress, economic slowdown, fraudulent practices, etc. The recovery of NPAs involves legal proceedings and can be a long process. Financial institutions use various measures to reduce the levels of NPAs in their books.