Question
In respect of an Overdraft/Cash Credit (OD/CC), when is
the advance treated as NPA?Solution
Overdraft/Cash Credit (OD/CC) facility is considered as Non-Performing Asset (NPA) when the account remains 'out of order'. An account is considered 'out of order' if the outstanding balance remains continuously in excess of the sanctioned limit or drawing power, whichever is lower, for 90 days or more. In other words, if the borrower exceeds the authorized credit limit or fails to maintain the required balance in the account, the account is considered 'out of order' and the advance is treated as an NPA.
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