An Analysis of Non-Performing Assets (Npa’s) of Scheduled Commercial Banks (Scb’s) in India

Scheduled Commercial Banks (SCBs) are banks listed in the Second Schedule of the Reserve Bank of India Act, 1934. These banks are authorized to carry out commercial banking activities and are eligible to avail facilities from the central bank, including refinancing and liquidity support. NPA is defined as a credit facility in respect of which the interest and/or installment of principal has remained ‘past due’ for a specified period of time. In simple terms, an asset is tagged as non- performing when it ceases to generate income for the lender. NPA is used by financial institutions that refer to loans that are in jeopardy of default. Once the borrower has failed to make interest or principle payments for 90 days the loan is considered to be a non-performing asset.