In this guide, you will learn more about the abbreviation NPA, NPA’s meaning, where it comes from, synonyms, how to use it, examples, and more.
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Kevin
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January 12, 2022
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We use abbreviations and acronyms all the time. If you’re unfamiliar with an abbreviation, it can be difficult to assume its proper meaning, even with context clues.
This guide will help you learn the definition, origin, and examples of NPA, so you’ll be better prepared to use it in the future.
What Does NPA Mean?
Using popular letters like “N”, “P’, and “A,” it’s normal for an abbreviation like NPA to have several different meanings. Before we examine some of the most common meanings of the abbreviation NPA, here are a few other meanings for the abbreviation:
- Newspaper Publishers Association
- Nutrition and Physical Activity
- National Production Authority
- National Ports Authority
- Nursing Practice Act
- Nationwide Pragmatic Agreement (FCC)
- Non Partisan Association
- National Pharmaceutical Association
- Naval Procurement Account (United States Navy)
The list could go on and on. Most typically, NPA is an abbreviation for some of the following meanings.
Numbering Plan Area
In the United States, NPA can refer to the Numbering Plan Area, the American numbering plan area for area codes. This is a telephone service that delineates phone numbers by their geographical location.
New People’s Army
The New People’s Army is the military unit or military wing of the Communist Party of the Philippines. The NPA focuses primarily on targeting Philippine security forces, and the unit opposes the military presence of the United States in the region.
The NPA is considered a terrorist organization as classified in 2017 by President Duterte in the Philippines. the U.S., the EU, and New Zealand.
The New People’s Army was formed in 1969, but they gained momentum and fighting power in the late 1980s. The group operates primarily through rural guerrilla fronts, but they also have developed urban assassination squads called Sparrow Units.
Non-Performing Assets
In financial institutions, an NPA is a non-performing asset. A non-performing asset is a classification of business or financial units like loans or advances that have been defaulted on or are in arrears.
When a loan is in arrears, that means that the principal payments or interest payments are late or have been missed. If these missed payments have caused the lender to consider the terms of the agreement broken, then the loan is in default. Typically, the debtor cannot fulfill their obligation to pay or will be unable to for the foreseeable future.
Usually, the account will have remained overdue without payment for 90 days. During this extended period of non-payment, the bank will take proactive steps to bring the borrower and their account back into good standing. Good standing is defined according to the loan terms stated in the loan agreement before classifying the type of account as an NPA.
These are some types of non-performing assets:
- Term Loan: When interest or principal installment payments remain due for more than 90 days, the loan will be treated as an NPA.
- Cash Credit (CC) and Overdraft (OD): When cash credits and overdrafts are past due for more than 90 days, they are sometimes treated as an NPA.
- Agricultural Advances: If these accounts have been past due for over two short crop seasons or one long-duration crop season, they can be classified as an NPA.
How Do Banks Manage Non-Performing Assets?
Non-performing assets will appear on a financial institution or bank’s balance sheet. When a financial institution agrees to lend money, there is always a normal risk. The debtor could lose their job, accidentally lapse on a payment, and more. That is why the length of time is usually several consecutive months before the advance or loan is considered an NPA.
Bank’s will typically break NPAs down into these categories:
- Standard Assets: If the asset has been an NPA for 12 months or less with a normal asset risk, it is categorized as a standard asset.
- Substandard Assets: If the assets have been NPAs for more than 12 months, the borrower’s creditworthiness is weak, the advance has a more than normal risk, and the bank is ready to take a haircut or less money on the loan amount, then they are sub-standard assets, and they will be placed in the substandard category. They are considered to be of little value.
- Doubtful Assets: If assets have been an NPA for 18 months or more, they will be placed in the category of doubtful debts or doubtful assets. These are just as they sound. The bank is highly doubtful that they will recover their assets.
- Loss Assets: This is the final category of NPAs. The bank, their internal auditor, or an external auditor has identified that collecting the amount owed is impossible. The bank will have to write off the entire loan amount.
A loan in default is a financial burden for the lender. After some time, the financial institution may take possession of any collateral or sell off the debt at a discount to a collection agency to reclaim some of their loss.
What Are Synonyms for NPA?
Synonyms allow us to say the same meaning using a different word. Frequently there is no direct synonym for an abbreviation, but there is usually a synonym for related words.
Here are a few synonyms for the common term non-performing assets:
- Delinquency
- Defaulted
- Nonpayment
- Blunder
- Absence
- Insufficient
- Lack
- Lapse
- Arrears
- Neglect
- Deficient
- Dereliction
What Are Antonyms for NPA?
Antonyms are words that mean the opposite of a particular word. As with synonyms, finding a suitable antonym for an abbreviation can be challenging. It’s much easier to identify words that are antonyms for the general concept the acronym describes. Here are antonyms for non-performing asset:
- Repay
- Active
- Good standing
What Are Examples of NPA in a Sentence?
Here are some examples of how to use NPA in a sentence:
- NPAs are non-performing assets.
- The news reports the NPA, the militant wing of the Communist Party of the Philippines, have received recent blows to their numbers.
- The American NPA determines your area code.
Conclusion
As you can see, there are many definitions for NPA. You’ll probably have to use context clues to figure out the meaning of NPA in daily conversations, but this guide can help you understand all of your options.
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