Non-Performing Assets (NPAs)
Definition, RBI Framework, and Significance
An NPA is a loan or advance for which principal or interest payment has been overdue for more than 90 days. RBI's Prudential Norms (issued under Section 21 of the Banking Regulation Act, 1949) require banks to classify NPAs into Sub-Standard, Doubtful, and Loss categories with corresponding provisioning requirements. The 2% NPA figure for PM-MUDRA is notable because critics had warned that collateral-free micro-loans to informal enterprises would generate high defaults — a concern the government used this data to rebut.
- NPA definition (RBI): Loan/advance where interest or principal overdue for more than 90 days
- NPA categories: Sub-standard (up to 12 months), Doubtful (12 months to 3 years), Loss (beyond 3 years or identified as such)
- Provisioning norms: Sub-standard — 15%; Doubtful — 25–100%; Loss — 100%
- PM-MUDRA NPA: ~2% overall; Shishu category: 1.83%
- India's Gross NPA ratio (banking sector): ~3.4% (FY 2024–25) — MUDRA NPAs are lower
- Credit Guarantee Fund for Micro Units (CGFMU): Government-backed guarantee reduces risk for lenders
● Tracked since March 17, 2026 · last seen June 30, 2026 · updates as the daily brief publishes
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