NPA — Non-Performing Asset
A loan account where the borrower has not made principal or interest repayments for 90 consecutive days.
When a borrower stops making loan payments, the bank initially classifies the account as a "Special Mention Account" (SMA). After 90 days of non-payment, the account is formally classified as a Non-Performing Asset. Once NPA, the bank must make higher provisions against the loan and can initiate recovery proceedings under SARFAESI, DRT, or IBC.
NPA classification severely impacts the borrower's CIBIL score and ability to obtain fresh credit. The best course of action is to engage with the lender early — restructuring or OTS before NPA classification is far more beneficial than waiting. SolveDet specialises in pre-NPA interventions and post-NPA resolution.
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