5. Companies would have to repay
loan with interest in timely
installment weather profit or loss
6. If companies not repay it on
time by intentionally or due
to loss, after 3 months it will
be considered as NPA for
banks.
7. Why these loans
considered as
the assets? Because these are
generally big
amounts and
which could be
turn into assets.
8. This is like, banks invest their
assets in particular business.
when it not
generating
profit or
return, that’s
mean their
assets is not
performing.
9.
10. 1 . sub-standard assets
Assets which have
not been paid
until 2 years from
the due date
11. 2.Doubtful assets
if there is some
possibilities to recover
NPA even after two years.
These are mostly loan to
weak businesses .
12. 3.Loss assets
Assets which which
have been considered
as loss and unable to
recover . Assets is
totally lost .
13. RBI has settled stander for NPA
for international system .
According to it, banks has to
secure some part of its funds
for the provision of NPA.
14. SEBI has notified rules to turn these NPA
into equities. Now bank can play a huge
role into administration of companies
which don’t pay their loans.
Provisions in Such rules Where loans from
consortiums and financial institutions
could be tern into equities under
guidelines of RBI.