Non-Performing Loans (NPLs) are loans in which the borrower has failed to make scheduled payments for a specified period, typically 90 days or more. These loans are considered a risk for financial institutions, as they indicate that the borrower may be unable to repay the debt. NPLs can arise from various factors, including economic downturns, job loss, or poor financial management. When a loan becomes non-performing, it can impact the lender's balance sheet and overall financial health. Financial institutions often need to set aside reserves to cover potential losses from these loans. Managing NPLs is crucial for maintaining the stability of the banking system and ensuring that credit remains available to borrowers.