| The concept of nonperforming asset (NPA) is new one in India. A non- performing asset basically implies an asset which fails to earn any income to the bank. On the other hand, an asset becomes non – performing when it ceases to generate any income for the bank. Up to the mid eighties there was no uniformity policy amongst banks in booking income from varies types of loans and advances granted by them. In order to ensure uniformity in booking income on loans as advance by all the commercial bank, the Reserve Bank Of India (R.B.I) introduced the health code system in 1986. Based on the recommendations of the Narasimham Committee. A new set of guidelines on income recognition, classification assets and provisioning for various types of non- performing assets have been formulated. |