RBI clarifies norms for upgrading of accounts classified as NPAs

Asks lenders to mention exact due date for repayment in loan agreements

The Reserve Bank of India on Friday clarified that lenders should reclassify a non-performing asset to “standard” asset only when the entire arrears of interest and principal are paid by the borrower.

The regulator has noted that some lending institutions were upgrading accounts classified as non-performing assets (NPAs) to ‘standard’ asset category upon payment of only interest overdues, partial overdues, etc.

"It has been observed that some lending institutions upgrade accounts classified as NPAs to ‘standard’ asset category upon payment of only interest overdues, partial overdues, etc. In order to avoid any ambiguity in this regard, it is clarified that