Non-Performing Asset - NPA


DEFINITION of 'Non-Performing Asset - NPA '

A classification used by financial institutions that refer to loans that are in jeopardy of default. Once the borrower has failed to make interest or principal payments for 90 days the loan is considered to be a non-performing asset.

Also known as "non-performing loan".

BREAKING DOWN 'Non-Performing Asset - NPA '

Non-performing assets are problematic for financial institutions since they depend on interest payments for income. Troublesome pressure from the economy can lead to a sharp increase in non-performing loans and often results in massive write-downs.

  1. Default

    1. The failure to promptly pay interest or principal when due. ...
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  3. Nonperforming Loan - NPL

    A sum of borrowed money upon which the debtor has not made his ...
  4. Default Risk

    The event in which companies or individuals will be unable to ...
  5. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
  6. Write-Down

    Reducing the book value of an asset because it is overvalued ...
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