CMA Final · Corporate Financial Reporting · NBFCs - Provisioning Norms, Accounting and Reporting
Under the RBI prudential norms applicable to NBFCs, a loan is classified as a non-performing asset (NPA) when interest or principal remains overdue for more than how many days?
An NBFC loan becomes a non-performing asset when interest or principal stays overdue for more than 90 days. The 30-day mark only signals a possible significant increase in credit risk under Ind AS 109 and does not make the loan an NPA.
- A30 days
- B60 days
- C90 daysCorrect
- D180 days
Explanation
The RBI's harmonised asset classification norms treat an NBFC loan as an NPA once any amount is overdue for more than 90 days. Shorter periods such as 30 or 60 days relate to early-stress identification and the Ind AS 109 Stage 2 presumption, not NPA status. A 180-day period is not the NBFC norm.
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