A slippage occurs when a bank's loan becomes a non-performing asset (NPA) on account of the borrower not paying interest for over 90 days. Any addition of NPAs during the year is called a slippage. Say, a bank's gross NPA was 5 percent in the last financial year and is 8 percent this year due to fresh accumulation of bad loans. In this case, the slippage would be at 3 percent for the current year. Slippage ratio refers to the rate at which a good loan becomes stressed. A sharp rise in slippage impacts banks' provisioning and net profit. Low or no slippage shows how well asset qualities are managed by the bank.