What’s the working of NPA?

Answer. The NPA follows the procedure given by RBI. This is as follows:

• The bank’s financial statements (balance sheet) show non performing assets (NPAs).
• Following a recent time of loan or instalment non-payment that is due, a lender does have the choice of either selling the promised resources or wiping the amount off as nonperforming loans and recovering the obligation through courts.
• By taking proactive actions to modify the debt, the lender can recoup losses.
• Bad debts can also be converted into equity by lenders.
• Creditors can potentially transfer the mortgages at a loss to various businesses and recoup part of the money.