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All those assets which generate perio ical income are calle as Performing Assets (PA). !hile all those assets which o not generate perio ical income are calle asNonPerforming Assets (NPA). "f the customers o not repay principal amount an interest for a certain perio of time then such loans #ecome non-performing assets (NPA). $hus non-performing assets are #asically non-performing loans. "n "n ia% the time frame given for classifying the asset as NPA is &'( ays as compare to )* ays to +( ays of international norms. "mage Cre its , mono-ussi. "n ia an NonPerforming Assets "n "n ia% NPA were very high in the #eginning of +(.s. /ver a perio of time there is consi era#le ecline in the NPA.s of all #anks. "n the case of pu#lic sector #anks% gross non-performing assets were +.)0 in 1((1-(2 an it ecline to 3.'0 in 1((2-(). $he net NPA uring the same perio ecline from ).*0 to 20. $ypes of NPA NPA have #een ivi e or classifie into following four types45tan ar Assets 4 A stan ar asset is a performing asset. 5tan ar assets generate continuous income an repayments as an when they fall ue. 5uch assets carry a normal risk an are not NPA in the real sense. 5o% no special provisions are re6uire for 5tan ar Assets. 5u#-5tan ar Assets 4 All those assets (loans an a vances) which are consi ere as nonperforming for a perio of &1 months are calle as 5u#-5tan ar assets. 7ou#tful Assets 4 All those assets which are consi ere as non-performing for perio of more than &1 months are calle as 7ou#tful Assets. 8oss Assets 4 All those assets which cannot #e recovere are calle as 8oss Assets. $hese assets can #e i entifie #y the Central Bank or #y the Au itors.
Provision on types of assets Provision is allocating money every year to meet possi#le future loss.
Causes of NPA NPA arises ue to a num#er of factors or causes like45peculation 4 "nvesting in high risk assets to earn high income. 7efault 4 !illful efault #y the #orrowers. 9rau ulent practices 4 9rau ulent Practices like a vancing loans to ineligi#le persons% a vances without security or references% etc. 7iversion of fun s 4 Most of the fun s are iverte for unnecessary e:pansion an iversion of #usiness. "nternal reasons 4 Many internal reasons like inefficient management% inappropriate technology% la#our pro#lems% marketing failure% etc. resulting in poor performance of the companies. ;:ternal reasons 4 ;:ternal reasons like a recession in the economy% infrastructural pro#lems% price rise% elay in release of sanctione limits #y #anks% elays in settlements of payments #y government% natural calamities% etc.