How do you calculate non performing asset?

Non-performing assets (NPAs) are calculated by identifying loans or advances that have not received principal or interest payments for a specified period, typically 90 days. To calculate the NPA ratio, divide the total value of NPAs by the total value of all outstanding loans, and then multiply by 100 to express it as a percentage. This ratio helps assess the quality of a bank's loan portfolio and its ability to manage credit risk.