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Friends
if you read the newspaper or watch the news, then you often get to see and hear
the name of NPA. Then the idea comes to your mind that after all what is NPA
and what is NPA Full Form. Today I will make you aware of all the meaning of NPA
so stay till the end of the article.
Table of Contents
NPA Full Form | What Is The Full Form Of NPA
NPA Full Form
The Full Form Of NPA is "Non-Performing Asset".
NPA Full Form In Banking / Bank NPA Full Form
The full Form Of NPA in banking is "Non-Performing Asset".
NPA Full Form In Share Market
The Full Form Of NPA in the share market is a "Non-Performing Asset".
NPA Full Form In Salary
The full Form Of NPA in salary is "Non-Practicing Allowance".
NPA Full Form In Telecom
The full Form Of NPA in salary is "Number Planning Area".
What is NPA?
A
loan given to someone by the bank is an asset for the bank. The bank earns money
in the form of interest and whoever has taken a loan from the bank that loan is
a liability for him because later that loan will be returned to the bank.
When
the interest and principal amount of the loan is repaid on time then that loan
is called Standard Asset and if the person who has taken the loan does not fill
the instalment of that loan for more than 90 days from the scheduled date then
that loan is called 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 Asset 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 billion |
NPA FAQ's
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 facility 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 Guideπ
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
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doubt then tell me in the comment section.
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for staying till the end of the article.
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