The correct answer is Doubtful. Doubtful assets: An asset would be classified as doubtful if it has remained in the substandard category for a period of 12 months. A non-performing asset (NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days. A loan is in arrears when principal or interest payments are late or missed. A loan is in default when the lender considers the loan agreement to be broken and the debtor is unable to meet his obligations. Banks are required to classify NPAs further into Substandard, Doubtful, and Loss assets, depending on the length of time overdue and probability of repayment. Substandard assets: Assets which has remained NPA for a period less than or equal to 12 months. Loss assets: As per RBI, œLoss asset is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted, although there may be some salvage or recovery value.