Non-Performing Loans (NPL)

Non-Performing Loans (NPLs) are loans where the borrower has failed to make scheduled payments—such as interest or principal—for a specified period, typically 90 days or more. Essentially, the loan is at risk of not being repaid in full, which can impact the financial health of banks and lending institutions. High levels of NPLs indicate potential problems in the economy or banking sector, as lenders may face losses and become more cautious in extending credit. Managing NPLs is crucial to maintaining financial stability and confidence in the banking system.