A non-performing asset (NPA) is a debt obligation that accrues when the borrower does not make predetermined interest payments and principal repayments to the lender for a time extending the specified period. The non-performing asset is one that does not yield any income to the lender. Usually, after a prolonged period of non-payment, the lender will force the borrower who is at default to sell the assets that were pledged as collateral. If no assets were pledged, the lender might write-off the asset as a bad debt. Banks usually categorize loans as nonperforming after 90 days of non-payment of interest or principal. If a borrower pays the interest but is unable to repay the principal, even then the loan would be termed as nonperforming. Nonperforming assets also known as nonperforming loans imposes burden on lenders in the form of reduced cash flows and significant amount of provisions to cover loss from bad loans.