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GLOSSARYTERMS AS A CREDIT DESK USES THEM

90 days past due (90 DPD)

What does 90 days past due mean, and why does it trigger default?

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BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

Ninety days past due is the arrears test in supervisors' definitions of default: once principal, interest or fees have been overdue for about three months, more than 90 days under UK rules and 90 or more under Australia's, the borrower is in default, whatever the bank thinks. The UK counts only material arrears, for business lending above both a small fixed amount and a share of the exposure; Australia also asks that the arrears reach 90 days' worth of payments. For an overdraft the count usually starts when the balance passes its advised limit, so a line left over its limit for three months can default without a missed instalment.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

// WHAT IT IS NOT

A non-performing loan is the wider classification: 90 days past due is one way in, and a judgement that the borrower is unlikely to pay is the other.

// WORKED IN

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