Let’s examine NPA in Indian context, what it means, various degrees, its magnitude and implications.
Categories of NPAs:
i. Sub-standard Assets
ii. Doubtful Assets
iii. Loss Assets
The level of NPAs vary for different sectors: (in % of gross advances)
The NPAs as percent of gross advances has come down over the years even though in absolute terms it has gone up. The first graph shows NPAs as percent of gross advances for Public Sector Banks while the second graph shows the actual NPAs (in Rs crores)
Steps for recovery of NPAs