2.6.1. What are Non-Performing Assets (NPA’s)

Non-performing assets, also called non-performing loans, are loans, made by a bank or finance company, on which repayments or interest payments are not being made on time. Generally speaking, NPA is any asset of a bank which is not producing any income. Once the borrower has failed to make interest or principal payments for 90 days the loan is considered to be a non- performing asset.

But in terms of Agriculture / Farm Loans; the NPA is defined as under: Short duration crop loan : Loan is termed as NPA in this scenario if the loan either in terms of installment or interest is not paid for 2 crop seasons, it would be termed as NPA. Example: Agri loans such as paddy, jowar, Bajra etc. For Long Duration Crops, the above would be 1 Crop season from the due date.