Banks are required to classify Non-Performing Assets into

  1. Doubtful assets, bad debts and loss assets
  2. Standard assets, and sub-standard assets
  3. Sub-standard assets, doubtful assets, and loss assets
  4. Doubtful assets, and bad debts
3. Sub-standard assets, doubtful assets, and loss assets

Banks are required to classify Non-Performing Assets into Sub-standard assets, doubtful assets, and loss assets. With effect from 31 March 2005, a sub­standard asset would be one, which has remained NPA for a period less than or equal to 12 months. With effect from March 31, 2005, an asset would be classified as doubtful if it has remained in the sub­standard category for a period of 12 months. A loss asset is one where loss has been identified by the bank or internal or external auditors or the RBI inspection but the amount has not been written off wholly.

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