Direct Answer
12 months
A Sub-Standard Asset is the initial penalty phase for a loan that has defaulted, acting as a temporary holding zone before further downgrade.
Step 1: Default Trigger
Status = NPA initiated at day 91
Step 2: Sub-Standard Holding Period
Duration = Months 1 through 12 of default
Step 3: Forced Downgrade
Next Action = Asset moves to Doubtful status
Exam tip: The timeline applies to the age of the default, not the age of the loan itself. The countdown starts the moment the account crosses the initial threshold of non-performance. Because borrowers often face short-term cash crunches, the twelve-month window provides a realistic timeframe for recovery before regulators demand heavier financial penalties against the bank.
Step 1: Default Trigger
Status = NPA initiated at day 91
Step 2: Sub-Standard Holding Period
Duration = Months 1 through 12 of default
Step 3: Forced Downgrade
Next Action = Asset moves to Doubtful status
Exam tip: The timeline applies to the age of the default, not the age of the loan itself. The countdown starts the moment the account crosses the initial threshold of non-performance. Because borrowers often face short-term cash crunches, the twelve-month window provides a realistic timeframe for recovery before regulators demand heavier financial penalties against the bank.