What is the meaning of gross npa of a bank
What is the direct meaning of NPA in banking Non Performing Asset, that is, a customer taking a loan where the bank’s money is stuck. Gross NPA of the bank (Gross NPA) means those loans or part of the loans of the bank which are not returned on time by the creditor and for which the bank becomes a financial hollow. Often, banks provide capital to people and businesses for various purposes, such as investment, buying a house, business growth, etc. These people and businesses are provided capital in the form of loans which they repay within a stipulated time. If these individuals or businesses do not repay their loans on time, the bank includes those loans as gross NPA. The basic objective of Gross NPA is to evaluate the financial position of the bank. At a reasonable level, gross NPAs above a certain amount can indicate how much capacity the bank has and has the funds to lend. At any point of time, if the Gross NPA is not properly settled, the financial position of the bank may get affected and it may impinge on its ability to lend.