Question

What is the difference between a non-performing asset (NPA) and a stressed asset in India?

A NPAs and stressed assets are the same thing in India Correct Answer Incorrect Answer
B NPAs are loans given to individuals, while stressed assets are loans given to businesses Correct Answer Incorrect Answer
C NPAs are loans given by private sector banks, while stressed assets are loans given by public sector banks Correct Answer Incorrect Answer
D NPAs are loans that have defaulted on repayment, while stressed assets are loans that are at risk of defaulting Correct Answer Incorrect Answer
E None of the above Correct Answer Incorrect Answer

Solution

The main difference between a non-performing asset (NPA) and a stressed asset in India is that NPAs are loans that have defaulted on repayment, while stressed assets are loans that are at risk of defaulting. An NPA is a loan where the principal or interest payment is overdue for more than 90 days, while a stressed asset is a loan where there is a likelihood of the borrower defaulting on payment due to various factors such as financial distress, change in management, or regulatory issues, among others. Therefore, option D is correct.

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