NPA & Asset Quality: Complete Banking Awareness Notes 2026
Learn Non-Performing Assets (NPA), Gross NPA, Net NPA, SMA accounts, asset classification, provisioning, Provision Coverage Ratio, stressed assets, restructuring, write-offs, SARFAESI, Asset Reconstruction Companies, IBC, NARCL and loan recovery for IBPS, SBI, RRB and other banking examinations.
1. What is NPA?
NPA stands for Non-Performing Asset.
Banks earn a significant part of their income from loans and advances. When a borrower does not make payments according to the applicable repayment terms and prudential rules, the loan can move from a performing asset into a stressed or non-performing category.
The NPA framework helps banks identify loans that are no longer generating income in the normal manner and apply appropriate classification and provisioning requirements.
2. What is Asset Quality?
Asset quality refers to the health and performance of a bank's assets, particularly its loan and investment portfolio.
For a bank, a loan is an earning asset because it is expected to generate interest and principal repayments.
If a large proportion of loans become stressed or non-performing, the bank may face lower income, higher provisioning requirements and pressure on profitability and capital.
Most loans perform normally and borrowers make payments on time.
A higher proportion of loans are overdue, stressed or non-performing.
3. Performing Assets
A performing or standard loan is generally one that is not classified as non-performing under the applicable prudential norms.
The borrower is expected to meet repayment obligations and the bank recognises income according to the applicable accounting and regulatory framework.
4. What are Stressed Assets?
Stressed assets are loans or financial assets showing signs of repayment difficulty or credit deterioration.
The broader stressed-assets concept can include early-warning accounts, NPAs and other problem loans depending on the framework being discussed.
Why stressed assets matter
- They can reduce bank income.
- They can increase provisioning requirements.
- They can reduce profitability.
- They can consume management resources.
- They can increase credit risk.
- They can eventually affect capital adequacy.
5. Special Mention Account (SMA)
SMA stands for Special Mention Account.
SMA classification is an important early-warning mechanism used to identify stress before an account reaches the NPA stage.
It allows banks to monitor repayment problems and take corrective action at an earlier stage.
6. SMA-0
SMA-0 represents the earliest stage of stress in the commonly used SMA framework.
Under the relevant regulatory framework for applicable loan categories, SMA-0 generally refers to an account where principal or interest payment is overdue for up to 30 days.
7. SMA-1
SMA-1 generally refers to a relevant loan account where principal or interest payment is overdue for more than 30 days and up to 60 days, subject to the applicable regulatory framework.
8. SMA-2
SMA-2 generally refers to a relevant loan account where principal or interest payment is overdue for more than 60 days and up to 90 days, subject to the applicable regulatory framework.
SMA-1: More than 30 to 60 days
SMA-2: More than 60 to 90 days
NPA: More than 90 days, where the applicable NPA rule is based on the 90-day overdue criterion.
9. When Does a Loan Become NPA?
The commonly tested rule is that a term-loan account becomes NPA when interest and/or instalment of principal remains overdue for more than 90 days.
The exact classification rules depend on the type of facility and the applicable RBI prudential norms.
| Stage | Typical Overdue Position | Exam Meaning |
|---|---|---|
| SMA-0 | Up to 30 days | Early stress |
| SMA-1 | >30 to 60 days | Increasing stress |
| SMA-2 | >60 to 90 days | Serious pre-NPA stress |
| NPA | >90 days under applicable rule | Non-performing |
10. NPA Rules for Cash Credit and Overdraft Accounts
Cash Credit (CC) and Overdraft (OD) accounts are not assessed in exactly the same way as a normal term loan.
The important concept is "out of order".
An account may be treated as out of order when the balance remains continuously above the sanctioned limit/drawing power or when there are no sufficient credits or credits are insufficient to cover interest debited during the applicable period, according to the relevant RBI rules.
11. Income Recognition and NPA
Once an asset becomes non-performing, income recognition rules change. Banks cannot continue treating unrealised interest as normal realised income merely because it has been accrued in the books.
Prudential norms therefore contain specific requirements for income recognition on NPAs.
12. Classification of Non-Performing Assets
Once an asset becomes NPA, it is generally classified into:
NPA for a specified period under the applicable prudential framework.
Asset that has remained in the sub-standard category for the period prescribed by applicable norms.
Asset where loss has been identified by the bank, internal/external auditors or RBI, although the amount may not yet have been completely written off.
13. Sub-standard Asset
A sub-standard asset is an NPA that has remained in the NPA category for the period prescribed under the applicable prudential framework.
It indicates that the bank has already identified the account as non-performing, but the asset has not yet moved into the more serious doubtful category.
14. Doubtful Asset
A doubtful asset is an asset that has remained in the sub-standard category for the period specified under applicable RBI norms.
Doubtful classification indicates a higher level of uncertainty regarding recovery compared with a sub-standard asset.
15. Loss Asset
A loss asset is an asset where loss has been identified by the bank, internal or external auditors or RBI inspection, although the amount has not necessarily been completely written off.
16. Gross NPA (GNPA)
GNPA means Gross Non-Performing Assets.
It represents the total amount of a bank's non-performing loans before adjusting for provisions and certain other deductions as prescribed.
A higher GNPA ratio generally indicates weaker asset quality.
17. Net NPA (NNPA)
NNPA means Net Non-Performing Assets.
Net NPA considers provisions and other applicable deductions against gross NPAs.
The exact regulatory calculation can include specified adjustments. Therefore, exam candidates should use the formula applicable to the particular question.
18. NPA Ratios
| Ratio | Basic Formula | What It Shows |
|---|---|---|
| Gross NPA Ratio | Gross NPAs ÷ Gross Advances × 100 | Overall proportion of gross advances that are NPAs |
| Net NPA Ratio | Net NPAs ÷ Net Advances × 100 | NPA level after relevant provisions/deductions |
19. Provision Coverage Ratio (PCR)
PCR stands for Provision Coverage Ratio.
It indicates the extent to which provisions cover non-performing assets.
A higher PCR generally indicates that a larger proportion of bad loans is covered by provisions, which can provide greater loss-absorption protection.
20. Provisioning for NPAs
Provisioning means setting aside an amount to absorb expected or recognised losses associated with stressed or non-performing assets according to applicable accounting and prudential requirements.
Why banks create provisions
- To recognise expected credit losses or deterioration as required.
- To protect against future losses.
- To strengthen the bank's financial position.
- To avoid overstating asset values.
- To comply with prudential requirements.
21. What is a Loan Write-off?
A write-off means that a bank removes or adjusts the recognised value of a bad loan from its books according to applicable accounting and regulatory treatment.
A technical or accounting write-off does not necessarily mean that the borrower is legally released from the repayment obligation.
22. Write-off vs Loan Waiver
| Write-off | Waiver |
|---|---|
| Accounting / balance-sheet treatment of a loan | Relief from repayment obligation under the applicable arrangement |
| Does not automatically mean debt is forgiven | Can eliminate or reduce the borrower's obligation according to the waiver |
| Recovery may continue | Recovery of waived amount is generally not pursued as a continuing liability |
23. Loan Restructuring
Loan restructuring involves changing one or more terms of an existing loan arrangement to help address financial stress, subject to applicable regulatory rules.
Possible restructuring elements
- Extension of repayment period.
- Change in repayment schedule.
- Modification of interest terms where permitted.
- Moratorium or repayment relief under permitted frameworks.
- Other changes permitted by applicable regulatory rules.
24. Stressed Asset Management
Effective stressed-asset management starts before a loan becomes a serious NPA problem.
Identify repayment stress through SMA accounts and early-warning signals.
Monitor cash flows, financial statements and repayment behaviour.
Use appropriate restructuring, recovery or insolvency mechanisms.
Recognise required provisions and protect the balance sheet.
25. Loan Recovery
Loan recovery means collecting amounts due from borrowers whose accounts have become stressed or non-performing.
Major recovery/resolution routes
- Negotiated settlement, where legally and commercially appropriate.
- Recovery through secured assets.
- Debt Recovery Tribunal mechanisms.
- SARFAESI proceedings where applicable.
- Sale/assignment of stressed assets.
- Asset Reconstruction Companies.
- Insolvency proceedings under IBC.
- Other legal recovery mechanisms.
26. SARFAESI Act
SARFAESI stands for Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
The Act provides a framework through which secured creditors can enforce security interests and recover dues without relying solely on the ordinary civil-court recovery process, subject to statutory conditions and safeguards.
Important exam points
- SARFAESI was enacted in 2002.
- It deals with securitisation, reconstruction of financial assets and enforcement of security interest.
- It is particularly associated with secured assets.
- Asset Reconstruction Companies operate within the legal/regulatory framework associated with stressed assets.
- The Act contains rights and remedies for borrowers and secured creditors.
27. Asset Reconstruction Company (ARC)
ARC stands for Asset Reconstruction Company.
An ARC is a specialised financial entity involved in acquisition and reconstruction of financial assets in accordance with the applicable legal and regulatory framework.
Basic ARC concept
A bank may transfer eligible stressed financial assets to an ARC. The ARC then undertakes reconstruction/recovery/resolution activities according to applicable law and regulations.
28. Insolvency and Bankruptcy Code (IBC), 2016
IBC stands for Insolvency and Bankruptcy Code, 2016.
IBC provides a time-bound legal framework for insolvency resolution and bankruptcy for eligible persons and entities covered by the Code.
Why IBC is important for banks
- Provides a formal resolution framework for stressed borrowers.
- Helps lenders participate in collective insolvency resolution.
- Creates a process for resolution rather than indefinite recovery attempts.
- Provides institutional mechanisms such as NCLT and IBBI.
29. Corporate Insolvency Resolution Process (CIRP)
CIRP stands for Corporate Insolvency Resolution Process.
It is the insolvency-resolution process used for corporate persons under the IBC framework.
Broad CIRP structure
- Insolvency application is admitted by the appropriate adjudicating authority.
- Moratorium begins as prescribed by the Code.
- Interim Resolution Professional is appointed.
- Claims are collected and verified.
- Committee of Creditors is constituted.
- Resolution plans are considered.
- Approved resolution plan is implemented according to the Code.
- If resolution fails, liquidation may follow subject to the legal framework.
30. NCLT
NCLT stands for National Company Law Tribunal.
NCLT acts as the adjudicating authority for corporate insolvency matters under the IBC, subject to the jurisdiction and provisions of the Code.
31. IBBI
IBBI stands for Insolvency and Bankruptcy Board of India.
IBBI is the statutory regulator established under the Insolvency and Bankruptcy Code framework.
It regulates insolvency professionals, insolvency professional agencies and information utilities and performs other functions assigned under the IBC framework.
32. Committee of Creditors (CoC)
CoC stands for Committee of Creditors.
In CIRP, the CoC plays a central role in evaluating and voting on resolution plans according to the IBC framework.
Financial creditors are central to the composition and decision-making structure of the CoC.
33. NARCL
NARCL stands for National Asset Reconstruction Company Limited.
NARCL was established as a specialised asset-reconstruction vehicle intended to help address large stressed assets in the Indian banking system.
It is commonly associated with the concept of a "bad bank" structure, although NARCL itself is an Asset Reconstruction Company rather than a conventional deposit-taking bank.
NARCL = National Asset Reconstruction Company Limited.
34. IDRCL
IDRCL stands for India Debt Resolution Company Limited.
IDRCL is associated with the resolution side of the NARCL-IDRCL structure. The two entities have complementary roles in dealing with stressed assets.
| Entity | Full Form | Broad Role |
|---|---|---|
| NARCL | National Asset Reconstruction Company Limited | Asset acquisition/reconstruction side |
| IDRCL | India Debt Resolution Company Limited | Resolution/management side |
35. What is a Bad Bank?
A bad bank is a commonly used term for an entity or institutional arrangement created to separate stressed or non-performing assets from the balance sheets of regular banks.
The objective is to allow regular banks to focus more on normal banking activities while specialised entities handle stressed assets.
36. Wilful Defaulter
A wilful defaulter is not simply any borrower who fails to repay a loan. The term has a specific regulatory meaning.
Broadly, wilful default can involve deliberate non-payment despite capacity to repay, diversion or siphoning of funds, disposal/removal of secured assets without the lender's knowledge in circumstances covered by the applicable framework, or other specified conduct.
37. Evergreening of Loans
Evergreening refers broadly to the practice of giving additional or fresh financing to an existing stressed borrower mainly to avoid recognising the underlying stress or NPA.
It can hide the actual quality of the loan portfolio and delay recognition of losses.
38. Fraud and Stressed Assets
Fraud can contribute to deterioration in asset quality, but fraud and NPA are not synonymous.
- An NPA can arise because of genuine repayment difficulties.
- A fraudulent loan can create significant credit losses.
- Fraud classification follows separate regulatory requirements.
- Asset classification and fraud reporting can operate together where applicable.
39. Early Warning Signals of Loan Stress
Banks monitor early-warning signals to identify deterioration before a borrower reaches a severe default stage.
| Early Warning Signal | Possible Concern |
|---|---|
| Repeated payment delays | Cash-flow stress |
| Declining sales | Weak business performance |
| Frequent excess borrowing | Liquidity pressure |
| Cheque returns | Potential cash-flow problems |
| Tax/statutory payment defaults | Possible financial stress |
| Frequent restructuring requests | Repayment difficulty |
| Sudden change in management | Possible governance/business risk |
| Decline in collateral value | Lower recovery protection |
40. Major Loan Recovery Mechanisms
Enforcement of security interest subject to statutory requirements.
Debt Recovery Tribunals deal with specified recovery matters.
Formal insolvency resolution framework.
Specialised mechanism for acquisition and reconstruction of stressed assets.
Negotiated resolution where permitted and commercially appropriate.
Other legal remedies available under applicable law.
41. Important NPA Comparisons
GNPA vs NNPA
| GNPA | NNPA |
|---|---|
| Gross Non-Performing Assets | Net Non-Performing Assets |
| Before relevant provisions/deductions | After relevant provisions/deductions |
| Shows gross level of NPAs | Shows residual NPA exposure after applicable adjustments |
SMA vs NPA
| SMA | NPA |
|---|---|
| Early-warning classification | Non-performing classification |
| Helps identify stress before NPA | Loan has crossed applicable non-performance criteria |
| Can support preventive action | Requires appropriate classification and provisioning treatment |
Provision vs Write-off
| Provision | Write-off |
|---|---|
| Amount set aside to absorb expected/recognised loss | Accounting treatment removing/adjusting the loan value from books |
| Does not mean loan is recovered | Does not necessarily mean borrower is released |
| Supports loss absorption | Can clean up the balance sheet treatment |
SARFAESI vs IBC
| SARFAESI | IBC |
|---|---|
| Enforcement/recovery of security interest | Insolvency resolution and bankruptcy framework |
| Particularly associated with secured assets | Broader insolvency framework for covered persons/entities |
| SARFAESI Act, 2002 | IBC, 2016 |
42. Important NPA Formulas
= Gross NPAs ÷ Gross Advances × 100
= Net NPAs ÷ Net Advances × 100
= Gross NPAs − relevant provisions and deductions
= Provisions for NPAs ÷ Gross NPAs × 100
= Amount Recovered ÷ Amount Due × 100
43. Important NPA & Recovery Full Forms
| Abbreviation | Full Form |
|---|---|
| NPA | Non-Performing Asset |
| SMA | Special Mention Account |
| GNPA | Gross Non-Performing Assets |
| NNPA | Net Non-Performing Assets |
| PCR | Provision Coverage Ratio |
| ARC | Asset Reconstruction Company |
| SARFAESI | Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest |
| IBC | Insolvency and Bankruptcy Code |
| CIRP | Corporate Insolvency Resolution Process |
| NCLT | National Company Law Tribunal |
| NCLAT | National Company Law Appellate Tribunal |
| IBBI | Insolvency and Bankruptcy Board of India |
| CoC | Committee of Creditors |
| NARCL | National Asset Reconstruction Company Limited |
| IDRCL | India Debt Resolution Company Limited |
| DRT | Debt Recovery Tribunal |
| DRAT | Debt Recovery Appellate Tribunal |
| CC | Cash Credit |
| OD | Overdraft |
| RBI | Reserve Bank of India |
44. Common NPA Exam Traps
Correct: SMA is an early-warning classification; NPA is a non-performing classification.
Correct: The applicable prudential rule depends on the facility and regulatory framework.
Correct: The "out of order" concept is important for CC/OD accounts.
Correct: GNPA represents the gross level of NPAs; NNPA reflects relevant provisions/deductions.
Correct: Provisioning is a loss-absorption/accounting prudential mechanism.
Correct: Write-off and waiver are different.
Correct: NARCL is an Asset Reconstruction Company.
Correct: SARFAESI focuses on enforcement/reconstruction of financial assets and security interests; IBC provides a formal insolvency-resolution framework.
Correct: Loss may be identified even when complete write-off has not yet occurred.
Correct: Evergreening can conceal stress rather than genuinely resolve it.
45. 100 Rapid Revision Facts
- NPA stands for Non-Performing Asset.
- NPA is an important measure of loan stress.
- Asset quality reflects the health of a bank's assets.
- Loans are major earning assets of banks.
- A performing asset generates income normally under applicable rules.
- NPA indicates non-performance under prudential norms.
- SMA stands for Special Mention Account.
- SMA is an early-warning category.
- SMA is not the same as NPA.
- SMA-0 represents early stress.
- SMA-1 generally covers more than 30 days up to 60 days overdue.
- SMA-2 generally covers more than 60 days up to 90 days overdue.
- A typical term loan becomes NPA after more than 90 days overdue under the applicable rule.
- NPA rules vary according to the nature of the facility.
- CC means Cash Credit.
- OD means Overdraft.
- Out-of-order is an important concept for CC/OD accounts.
- Income recognition changes when an account becomes NPA.
- NPA classification helps banks recognise asset-quality deterioration.
- Standard asset is not an NPA.
- Sub-standard is an NPA classification.
- Doubtful is an NPA classification.
- Loss asset is an NPA-related classification.
- The broad sequence is Standard → Sub-standard → Doubtful → Loss.
- A sub-standard asset is an NPA in the applicable sub-standard period.
- A doubtful asset has remained in the sub-standard category for the prescribed period.
- A loss asset has identified loss characteristics under the applicable framework.
- Loss asset does not necessarily mean complete write-off has occurred.
- GNPA means Gross Non-Performing Assets.
- NNPA means Net Non-Performing Assets.
- Gross NPA is measured before relevant provisions/deductions.
- Net NPA reflects relevant provisions/deductions.
- Gross NPA ratio is a measure of gross asset-quality stress.
- Net NPA ratio reflects residual NPA exposure after applicable adjustments.
- A higher NPA ratio generally indicates weaker asset quality.
- PCR stands for Provision Coverage Ratio.
- PCR measures the extent of NPA coverage by provisions.
- Higher PCR generally provides greater provision coverage.
- Provisioning is not recovery.
- Provisioning helps absorb potential losses.
- Provisioning can affect bank profitability.
- Write-off is different from waiver.
- A write-off does not automatically release the borrower from liability.
- Recovery efforts may continue after write-off.
- Restructuring changes loan terms under applicable rules.
- Restructuring does not automatically eliminate stress.
- Banks monitor stressed assets to protect asset quality.
- Early-warning signals help identify stress before severe default.
- SARFAESI was enacted in 2002.
- SARFAESI relates to securitisation and reconstruction of financial assets.
- SARFAESI also deals with enforcement of security interest.
- SARFAESI is particularly important for secured assets.
- ARC means Asset Reconstruction Company.
- ARCs specialise in acquisition/reconstruction of financial assets under the applicable framework.
- IBC stands for Insolvency and Bankruptcy Code.
- IBC was enacted in 2016.
- IBC provides an insolvency-resolution framework.
- CIRP stands for Corporate Insolvency Resolution Process.
- NCLT stands for National Company Law Tribunal.
- NCLT is an adjudicating authority for corporate insolvency under IBC.
- IBBI stands for Insolvency and Bankruptcy Board of India.
- IBBI is the insolvency regulator under the IBC framework.
- CoC stands for Committee of Creditors.
- Financial creditors play a central role in the CoC.
- NARCL stands for National Asset Reconstruction Company Limited.
- NARCL is an Asset Reconstruction Company.
- NARCL is not a normal deposit-taking commercial bank.
- IDRCL stands for India Debt Resolution Company Limited.
- NARCL and IDRCL are associated with stressed-asset resolution.
- "Bad bank" is a popular descriptive term.
- A bad-bank structure aims to separate stressed assets from normal banking operations.
- Wilful default has a specific regulatory meaning.
- Not every borrower who fails to repay is a wilful defaulter.
- Diversion of funds can be relevant to wilful default criteria.
- Siphoning of funds can be relevant to wilful default criteria.
- Evergreening refers broadly to fresh financing used to conceal existing stress.
- Evergreening can delay recognition of asset-quality problems.
- Fraud and NPA are not identical concepts.
- A loan can become NPA without fraud.
- Fraud can contribute to credit losses.
- Cheque returns can be an early-warning signal.
- Repeated payment delays can signal financial stress.
- Declining sales can be an early-warning signal for corporate borrowers.
- Excess borrowing can indicate liquidity pressure.
- Declining collateral value can increase recovery risk.
- Loan monitoring should continue after disbursement.
- Credit appraisal alone cannot prevent every NPA.
- Cash-flow analysis is important in credit monitoring.
- Recovery and resolution are different concepts.
- Recovery focuses on collecting dues.
- Resolution focuses on finding a sustainable solution to financial distress.
- SARFAESI and IBC serve different legal purposes.
- DRT means Debt Recovery Tribunal.
- DRAT means Debt Recovery Appellate Tribunal.
- NPA provisioning protects banks from overstating asset values.
- GNPA and NNPA should not be treated as identical.
- PCR should not be confused with NPA ratio.
- Write-off should not be confused with loan waiver.
- SMA should not be confused with NPA.
- CC/OD accounts require attention to the out-of-order concept.
- Asset quality affects bank profitability.
- Asset quality can affect capital strength.
- High NPAs can reduce interest income.
- High NPAs can increase provisioning requirements.
- Effective early-warning systems help reduce future NPAs.
- Stressed-asset management requires monitoring, provisioning and resolution.
- Always verify current RBI prudential norms before using numerical rules in final exam notes.
46. Frequently Asked Questions
What is NPA?
NPA means Non-Performing Asset. It is a loan or advance classified as non-performing according to applicable prudential norms.
What is the 90-day NPA rule?
For a typical term loan, an account is generally classified as NPA when interest and/or principal instalment remains overdue for more than 90 days, subject to the applicable RBI rules.
What is SMA?
SMA means Special Mention Account. It is an early-warning classification used to identify repayment stress before an account becomes NPA.
What is GNPA?
GNPA means Gross Non-Performing Assets. It represents the gross amount of a bank's NPAs before relevant provisions and deductions.
What is NNPA?
NNPA means Net Non-Performing Assets. It reflects the NPA exposure after relevant provisions and deductions.
What is PCR?
PCR means Provision Coverage Ratio. It indicates the extent to which NPAs are covered by provisions.
Does write-off mean waiver?
No. Write-off and waiver are different. A write-off is an accounting/ balance-sheet treatment and does not automatically release the borrower from the debt.
What is SARFAESI?
SARFAESI stands for Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
What is an ARC?
ARC means Asset Reconstruction Company. It is a specialised entity involved in acquisition and reconstruction of financial assets under the applicable legal and regulatory framework.
What is NARCL?
NARCL means National Asset Reconstruction Company Limited. It is an Asset Reconstruction Company associated with India's stressed-asset resolution framework.
What is IBC?
IBC means Insolvency and Bankruptcy Code, 2016. It provides a formal framework for insolvency resolution and bankruptcy for covered persons and entities.
47. SEO Keyword Map
| Search Intent | Target Keywords |
|---|---|
| Basic | NPA meaning, NPA full form, what is NPA |
| Exam Notes | NPA banking awareness notes, NPA notes for IBPS, NPA notes for SBI |
| SMA | SMA account, SMA-0, SMA-1, SMA-2, SMA vs NPA |
| Ratios | GNPA, NNPA, GNPA ratio, NNPA ratio, PCR banking |
| Recovery | NPA recovery, loan recovery, stressed assets, bad loans |
| Legal | SARFAESI Act, IBC 2016, ARC, NCLT, IBBI |
| Bad Bank | NARCL, IDRCL, bad bank India, stressed asset resolution |
| Competitive Exams | IBPS NPA questions, SBI NPA questions, RRB NPA questions, banking awareness NPA MCQs |
48. Official Verification Sources
NPA classification, provisioning, restructuring and recovery rules can change through RBI directions and amendments to law. Final examination preparation should therefore be checked against current official sources.
- Reserve Bank of India: Prudential norms on income recognition, asset classification and provisioning.
- India Code: SARFAESI Act, Insolvency and Bankruptcy Code and other statutory texts.
- Insolvency and Bankruptcy Board of India: IBC regulations and insolvency framework.
- Department of Financial Services: Government information on banking-sector reforms and stressed assets.
49. Final NPA Memory Chart
| Concept | Remember |
|---|---|
| NPA | Non-Performing Asset |
| SMA | Early-warning account classification |
| SMA-1 | >30 to 60 days |
| SMA-2 | >60 to 90 days |
| NPA | Generally >90 days for applicable term-loan rule |
| CC/OD | Remember "out of order" |
| Classification | Standard → Sub-standard → Doubtful → Loss |
| GNPA | Gross Non-Performing Assets |
| NNPA | Net Non-Performing Assets |
| PCR | Provision Coverage Ratio |
| Provision | Loss-absorption/accounting protection |
| Write-off | Not the same as waiver |
| SARFAESI | Security-interest enforcement/reconstruction framework |
| ARC | Asset Reconstruction Company |
| IBC | Insolvency and Bankruptcy Code, 2016 |
| CIRP | Corporate Insolvency Resolution Process |
| NCLT | Corporate insolvency adjudicating authority |
| IBBI | Insolvency regulator |
| CoC | Committee of Creditors |
| NARCL | National Asset Reconstruction Company Limited |
| IDRCL | India Debt Resolution Company Limited |