Q. In which of the following conditions, an account becomes a NPA (Non Performing Asset) ?
Answer: A cash Credit account is out of order for more than 90 Days
Notes: An account becomes a Non-Performing Asset (NPA) when it is classified as such due to the borrower's failure to meet repayment obligations. Specifically, a cash credit account is considered out of order if it remains overdrawn for more than 90 days. According to the Reserve Bank of India (RBI) guidelines, an account is classified as NPA when interest or principal payments are overdue for 90 days or more. This classification helps banks manage risk and maintain financial stability.