Non-Performing Assets
Under the guidelines, income recognition, and provisioning in respect of a credit facility are based on its status of classification as performing or nonperforming. A credit facility becomes non-performing “when it ceases to generate income for a bank”. Detailed guidelines have been laid down for determining the status of different kinds of credit facilities (term loans, cash credits and overdrafts, bills purchased and discounted, and other credit facilities) as performing or non-performing.