NPA - Meaning, Types and Causes

One of the most important questions asked in bank interviews is "Why NPA is so high in PSU banks ?"

If you are going to appear for even clerk interviews then you should learn this concept.

NPA Full Form : Non-performing Assets

What is NPA

NPA Meaning (Non-performing Assets) - All those assets which don't generate regular income are known as NPA.

Types of assets

Standard assets :- Assets which are generating regular income to the bank

Sub-standard assets :- An asset which is overdue for a period of more than 90 days but less than 12 months

Doubtful assets :- An asset which is overdue for a period of more than 12 months.

Loss assets :- Assets which are doubtful and considered as non-recoverable by bank, internal or external auditor or central bank inspectors

Sub-standard assets, Doubtful assets and Loss assets are NPA.

Causes of NPA

Default  - One of the main reason behind NPA is default by borrowers.

Economic conditions - The Economic condition of a region affected by natural calamities or any other reason may cause NPA.

No more proper risk management - Speculation is one of the major reason behind default. Sometimes banks provide loans to borrowers with bad credit history. There is a high probability of default in these cases.

Mis-management - Often ill-minded borrowers bribe bank officials to get loans with an intention of default. 

Diversion of funds - Many times borrowers divert the borrowed funds to purposes other than mentioned in loan documents. It is very hard to recover from this kind of borrowers.

In case you have any query or you want to add anything then comment below. If I find any comment is adding value to the post then I will add that comment to the post.


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54 comments:

  1. Love you raman sir.

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  2. Sir can U post diff. Between net npa and gross npa and concept of nii..

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  3. sir result kab aaega...koi idea SIR JEE

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  4. Mr. Raman there is so much uproar among candidates regarding the P O Results that it would be very soothing if you provide ur insights regarding the same.

    E/G

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  5. thank you sir for all your valuable information,i have been scheduled for an interview for clerk post,in our state 63 is the cut off for genral,i have secured 91 marks,sir what are my chances of getting job,sir please reply

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  6. sir today feb 4 !!!!!!!!! when will be the IBPS declare the result????????????

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  7. let see what happen with your 5th feb prediction.... then u can publish one more article about your prediction that turn out to be wrong..... lol

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  8. abe chutiye kam ki bat kar ibps po 3 ka result kab aayega ????

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  9. Thanks sir
    in my po intrvw intrvewar asked what is the diffrence between Gross NPA and Net NPA
    pls reply sir

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  10. whenever banks provide loan against security then how customers default?

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  11. Sir When would be the combined result of ibps 3 will be announced

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  12. Thank you sir for sharing the valuable info:)

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  13. some people are scolding you about po 3 result............but i dont agree with that because, no one will provide this much of valuable information.........thanks raman for everything you provided till now......hope you continue this..................so,finally please analyse the present po result situation whether it is correct or wrong..........what about expected final cut off for general and OBC

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  14. Sir today 5th Feb! Expecting PO result????

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  15. Mr. Raman Deep Today is 5th February, Is there any hope to declare the Final result of PO-III

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  16. default risk means when a borrower intentionally does not pay the borrowed amount or loan...raman u r right but i just explained for better understanding of non financial background student...

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  17. helpful.....
    sir aj kb tk result ayega..
    aj 5th feb h apne kahaa tha aj k liye

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  18. po3 results ???????????????

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  19. Hello raman sir...is color blindness a bar for appointment as bank po ? ... i mean partial color blindness not total...and when will we need to submit the documents we have given an undertaking for at the time of interview...

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  20. Sir explained it fully like, act to recover amount from defaulter, how manages all that and most importantly how to rate assets.

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  21. Hello Mr Ramandeep
    Hope u r doing Gud
    Plz update regarding PO 3
    Waiting 4 ur reply

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  22. po3 ka result kab ayagaa raman sir? aapne 5th feb k liye bola tha, koi chances hai aaj k?

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  23. sir , please clarifi on ssc 4th feb new notice ( clarification regarding ssc cgl 2013)

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  24. Sir I am having doubt??

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  25. Dear ramandeep u hav told in your blog that po 3 int result going to announce today...guys lets see ramandeep will b right or wrong

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  26. sir are you there

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  27. we want po results,aur kuch sunai nahin de raha hai

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  28. Kha ho bhai ramandeep ji..........tussi bole the ki result will be declare on 5th of feb.lo ji 5th feb bhe aa gya kya hua..........????????/

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  29. result nahi aayegaa.. i confirmed it from IBPS

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  30. this time, there wil b direct alotment in po3. As in po 2 interview notification,ibps mentioned the date of announcement of combi
    ned score but in po3, ibps did nt mention dis date.only mentioned alotment

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  31. ARRE BHAI DEKHO RAMAN NE HUM SABKO EK FORUM DIYA HAI APNE IDEAS AUR VIEWS SHARE KRNE K LIYE, HE IS ALSO WAITING LIKE US FOR RESULTS. IT IS UP TO IBPS TO DECLARE RESULT NOT MR. RAMAN. EK DUSRE SE HI DISCUSSION KR LO JO BHI KRNI HAI JO BHI INFO MILTI YAHAAN PE SHARE KR LO

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  32. PO result will be announced when banks clears their vacancy, only syndicate bank clarify the need of 1750 employ, so when other banks announced their requirement, then the final cut-off and result will be declared.

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    Replies
    1. UCO bank also announced its vacancy for po... 1300 posts

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    2. Uco bank announced for 1300 PO Vacancy .

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  33. sir salary person ki balance sheet banayi ja sakti h kya?

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  34. How to reprint ibps rrb clerk application form.

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    Replies
    1. ibps recruitment portal of facebook ko google meh search Karo. Page open ho jayega. Usme 3 ya 4 page jab back karoge to synidicate bank vacany show hogi. Usi meh niche comments dekho. Vehi par ibps clerk print application form ki link hai. Reg. No. , passward aur date of birth dalo , ho jayega.

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  35. My fathrs surname is different in 10 nd application form of clerk.pls anyone help.ramandeep if u have sometime pls help me.anyone out of u alll can help me out ?-preeti

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  36. KB AYEGA PO3 KA FINAL RESULT?????

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  37. guys bad news for us ek p.o 2 qualifier ne case kiya hai ibps pe ki 3rd allotment ke issue ko leke aur wo high court se case jeet bhi gaya hai ab we ibps aur wo banda supreme court mein hain case ko leke aur us bande ne jite bhi aspirants hai jo 3rd allotment ki cuttoff se near by hain unhone 5000 ka chanda bhi diya hai aur unlogo ne ram jethmalani ko hire kar liya hai to ab kafi delay ho sakta hai kyon ki case supreme court mein hai.....yaar ye to what laga di us bande ne......ye sahi khabar hai bhai aaplog pls gaali mat dena mujhe pata chala to maine bata diya aur haan aaplogo se req hai ki kindly 3rd aalotment wali notification ko dhyan se dekhna kyon ki usi mistake ke upar us bande ne case kiya hai................

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  38. r sir kha gaya apka prediction about result?

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  39. friends relax ......stop blaming raman sir for his prediction for ibps po 3 result he is also a aspirant like us though he have good knowledge and experience of ibps from past some years . He is not a ibps authority who can tell u exact date so plz stop blaming him every one is getting frustrated it does`t mean u blame other. Raman sir really help us through his blog he does`t deserve this type of reaction from any of us

    only good news till now is 2 bank have given their no. of vacancy
    uco 1300 in po 3 which was 1000 in po2
    syndicate 1750 in po 3 which was 1500 in po2

    comparing by this we may say this time no. of vacancy may increase from 22415
    so seat may be 22415+
    as po2 have more seat then po1 finger crossed
    and be relax result will be declared when ibps want to declare it
    till then just pray for best
    all the best to all

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  40. Sirji po3 ka result kab hai. Kuth toh reply dijiye.

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  41. sir bankadda has given clarification regarding ibps po 3 result, what about u sirji,get some idea sirji.

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  42. Is there chance for PO 3 combined score to be released before February 10???

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  43. 5th feb gone Mr. Raman.If you are not sure about something then you shouldn't make such baseless predictions..

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  44. Sir, i need ur help. At the time of marking preference for the post in CGL-14 I marked stastical grade-2 although i'm not eligible for this. Now, what to do? Pls advice me. It's better to reapply? Pls pls pls help me

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    Replies
    1. Please reply sir

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    2. Dont worry bro. There is no problem. Relax.

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  45. I just called ibps Mumbai n they're saying results will be out after one month...:(
    Bhagya Sree

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  46. hi sir i have clerk interview on 18th i have small problem in online form i filled my father's name in short form like "A.V.Ramana reddy " but in certificates its like "Aleti venkat Ramana Reddy" will it create any problem please tell me sir or ny1 clarify my doubt

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