The correct answer is 2 and 3 only. Explanation & Key Takeaways: • In recent years to the deterioration of asset quality of commercial banks by way of Non-Performing Assets of- • Infrastructure sector • Industrial sector • In July 2020, Reserve Bank of India (RBI) governor Shaktikanta Das said non-performing assets (NPAs) relating to infrastructure loans of banks have remained at elevated levels. Related Concepts: • According to the Reserve Bank of India (RBI), the gross non-performing assets in Indian banks, specifically in public sector banks, are valued at around Rs 400,000 crore (~US$61.5 billion), which represents 90% of the total NPA in India. Important Notes: • 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. • Doubtful assets: An asset would be classified as doubtful if it has remained in the substandard category for a period of 12 months. • Loss assets: As per RBI, “Loss 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”.