What is NPA and NPA full form – Full Guide 2023

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What Is NPA And NPA Full Form, Hello friends, welcome to all of you on our website FullformsMeaning. Today once again we are here for you with important information which is known as What Is NPA And NPA Full Form.


Friends, have you also searched about the Full Form of NPA, what is the meaning of NPA, what is NPA full form and what is NPA, etc India And you are disappointed because not getting a satisfactory answer so you have come to the right place to Know the basics about NPA full form in the bank, NPA meaning in English, what is NPA means and NPA in India.

If you read or watch the news, you may have come across the name “NPA.” After reading or watching it, you may be wondering what is the full form of NPA. In this article, I will explain what is NPA and its full form.


What is NPA and NPA full form?

 



NPA Full Form 

N – Non

P – Performing

A – Asset

Thus the Full Form Of NPA is a Non-Performing Asset“.

Another Full Form Of NPA


Short form

Full Form

NPA Full Form In Banking             

Non-Performing Asset

NPA Full Form In Share Market   

Non-Performing Asset

NPA Full Form In Salary

Non-Practicing Allowance

NPA Full Form In Telecom           

Number Planning Area

What is NPA?

When a bank lends money to someone, it earns money in the form of interest. The person who takes the loan is responsible for it and will have to repay it eventually.

If someone repays their loan on time, it’s considered a Standard Asset. If they don’t pay it back within a certain amount of time, it’s considered a Non-Performing Asset.

What Is The Meaning Of NPA?

NPA helps in knowing the financial condition of the bank, so it is very important to see the NPA while analyzing the bank. NPA has its own different criteria for agriculture and some specific loans. 

The interest received on the loan is income for the bank and when the bank Stops generating income from that loan, it becomes an NPA for the bank.

In the last two four years, the NPA of the bank i.e. Non-Performing Assets has increased rapidly and is seen mainly in Public Sector Bank.

What Are The Reasons For Becoming NPA?

There are the following reasons for becoming NPA.

1. Many times the loan is given to the borrower without proper investigation becoming NPA.

2. Many times loan is given due to the influence of the political party becoming NPA.

3. Many times the loan is given by an acquaintance, in which there is no complete verification of the borrower becoming an NPA.

4. The Sufficient Asset is not pledged from the borrower. This is the main reason for NPA.

Due to these reasons, the NPA of the bank increases.

Types Of NPA

Banks categorize NPAs into three categories.

1. Substandard Asset

2. Doubtful Asset

3. Loss of Asset

1. Substandard Asset

Loans that are NPA for 12 months or less are called Substandard Assets.

 2. Doubtful Asset

A loan that remains NPA for more than 1 year, then it is called a Doubtful Asset, which means that the loan whose chances of recovery are very less.

 3. Loss of Asset

NPAs in which the bank has to bear the loss. Either the bank is unable to recover or even if it does, then the borrower does not have enough assets from which the bank can recover the amount given by the bank.

How Can The Bank Recover NPA?

To recover money, the bank adopts different types of processes, such as recovering money by selling whatever the borrower has mortgaged.

If someone has taken a loan by pledging the shares of his company with the bank, then on not repaying the loan, the bank recovers the money by selling those shares.

Many times, if the company does not repay the loan, the banks take the company to the NCLT i.e. National Company Law Tribunal, where the bank recovers its money by liquidating the company by selling all the assets of the company or by selling the entire company.

Most of the time, the bank is not able to recover its entire money through the liquidation of the company, if the loan is unsecured means the bank has given a loan without pledging anything such as a personal loan and no one repays that unsecured loan then that loan becomes very difficult for the bank to recover.

Top 5 Highest NPA Banks In India

Bank Name 
Gross NPA
1. State Bank of India
Rs.2.01 trillion
2. Punjab National Bank
Rs.552 billion
3. IDBI Bank
Rs.445 billion
4. Bank of India
Rs.434 billion
5. Bank of Baroda  
Rs.416 biRs.416 billion

 

NPA FAQs?


What is the Bank Overdraft Facility?


The facility of overdraft is usually provided in the current account, you can withdraw money from the bank till the amount of money you have in your bank account and the limit that the bank has provided to you. Thus the bank gives overdraft facilities and the overdraft facility also promotes NPA.

 

If a company has taken an overdraft and that company is unable to pay the overdraft to the bank after 90 days from the date of repayment of the overdraft, then after that it will become an Overdraft Non-Performing Asset ie NPA.

 

What is NPA Ratio?


There are some ratios related to NPA

 

1. NPA Ratio

 

2. Provision Coverage Ratio

 

How is the NPA Percentage calculated?


NPA % = (Non-Performing Asset / Total Loans) × 100

 

This formula is used to calculate NPA %.

 

Which public sector bank has the highest NPA?


SBI (State Bank Of India)

 

Why there is a problem with NPA?


Many big companies did not repay the loan after taking the loan from the bank and many banks have increased the problem of NPA for themselves by distributing the loan without any security.

 

 

NPA Full Form YouTube Video Guide👇

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Conclusion

 

The main focus of the bank should be how to keep NPA to a minimum because NPA makes a big difference to the financial health of the company.

Through the above article NPA Full Form | what is the Full Form of NPA, I have told you the Full Form of NPA, what is the meaning of NPA, what is NPA full form, what is NPA, NPA’s full form in the bank, NPA meaning in English, what is NPA means and NPA in India.

I hope you have got the answer to all the questions related to NPA. If you liked this information, then definitely share it with your friends. If you have any doubts then tell me in the comment section.

Thanks for staying till the end of the article.

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