---
title: "Non-Performing Asset Definition | Model Diplomat"
description: "A non-performing asset is a loan where payments have stopped for 90 days or more, impacting banks' income. Essential for civil services candidates."
url: "https://modeldiplomat.com/learn/glossary/non-performing-asset"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- A non-performing asset is a loan or advance on which the borrower has stopped paying interest or principal for 90 days or more.
- After how many days overdue is a loan classified as an NPA in India?
- What is the difference between Gross NPA and Net NPA?
- What are the three sub-categories of NPAs?
- Which legal mechanisms exist to resolve NPAs in India?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

A non-performing asset is a loan or advance on which the borrower has stopped paying interest or principal for 90 days or more.

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In its 2015 Asset Quality Review, RBI Governor Raghuram Rajan compelled banks to reclassify concealed stressed loans as NPAs, pushing the public-sector Gross NPA ratio above 11 percent by March 2018.

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