NPL (Non-Performing Loans)

Non-Performing Loans (NPLs) are loans where the borrower has failed to make scheduled payments—usually for 90 days or more—indicating the borrower might be unable or unwilling to repay. These loans are problematic for banks because they represent money that’s unlikely to be recovered promptly, affecting the bank’s financial health. High levels of NPLs suggest increased risk in the lending environment and can signal economic difficulties. Managing NPLs involves efforts to recover funds or minimize losses, and they are monitored closely by regulators and financial institutions to assess economic stability.