Question
An asset is classified as NPA if the interest payment is
overdue for 90 days, from the financial year ending on –Solution
An asset is classified as the Non-Performing Asset if there is no interest payment for a period of 90 days or more. This norm for identification of NPA has come into force from the financial year ending on March 31, 2004. It can happen if the cash credit or overdraft facility is out of order or a bill remains overdue for a period of more than 90 days, in case of the bills purchased and discounted.Â
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