Declaring an Account as NPA on the 90th Day of Irregularities Is in Compliance with RBI Norms under the Banking Regulation Act: Delhi High Court

The Delhi High Court has held that a bank’s decision to classify an Overdraft or Cash Credit account as a Non-Performing Asset (NPA) on the 90th day of continuous irregularity is not premature. The Court clarified that the RBI’s Prudential Norms issued under Section 21 and Section 35A Banking Regulation Act, 1949 give banks statutory authority to classify an account as NPA immediately upon the completion of the mandatory 90-day…