Consumer Education — SMA & NPA Classification

This note explains how loan accounts are classified into Special Mention Account (SMA) and Non-Performing Asset (NPA) categories, as per RBI's Income Recognition, Asset Classification and Provisioning (IRAC) Norms.

SMA Classification

For loans other than revolving facilities (term loans):

• SMA-0: Principal or interest overdue up to 30 days.
• SMA-1: Principal or interest overdue between 31 and 60 days.
• SMA-2: Principal or interest overdue between 61 and 90 days.

NPA Classification

An account is classified as NPA if principal or interest remains overdue for more than 90 days.

Day-end Classification

Classification of an account as SMA or NPA is done at the day-end of the relevant date. For example, if the due date of a loan is 31 March 2026 and full dues are not received before the day-end of 31 March 2026, the date of overdue is 31 March 2026. If it continues to remain overdue, it will be tagged SMA-1 at the day-end of 30 April 2026 and SMA-2 at the day-end of 30 May 2026. If it continues to remain overdue, it will be classified as NPA at the day-end of 29 June 2026.

Upgrade of NPA Accounts

An NPA account is upgraded as a Standard asset only when the entire arrears of interest and principal are paid by the borrower.

Illustrative Example