Customer Awareness - Regarding Classification of Loan Account as SMA and NPA
RBI circular no. RBI/DOR/2025-26/345 DOR.CAP.REC.264/21-01-002/2025-26 on 'Prudential norms on Income Recognition, Asset Classification and Provisioning, pertaining to Advances - Clarifications' dated November 28, 2025.
A. Clarification on Overdue: An amount is to be treated as overdue if it is not paid on the due date fixed by the Lender (before the Lender runs the day-end process for that day). Due Date is the date as specified in the Repayment Schedule on which the instalment is due to be paid.
B. Classification as Special Mention Account (SMA) and Non-Performing Asset (NPA)
The below lllustration covers the concepts of
date of overdue, classification as Special
Mention Account ("SMA") and Non-Performing
Asset (NPA), upgradation of loan account etc.
Loans other than revolving facilities |
Loans in the nature of revolving facilities like
cash credit/overdraft |
SMA Sub-categories |
Basis for classifi cation
- Principal or interest
payment or any other
amount wholly or
partly overdue |
SMA Sub-categories |
Basis for classification
- Outstanding balance
remains continuously
in excess of the
sanctioned limit or
drawing power,
whichever is lower, for
a period of: |
SMA-O |
Upto 30 days |
-------- |
---------- |
SMA-1 |
More than 30 days and
upto 60 days |
SMA-1 |
More than 30 days and
upto 60 days |
SMA-2 |
More than 60 days and
upto 90 days |
SMA-2 |
More than 50 days and
upto 90 days |
NPA |
More than 90 days |
NPA |
More than 90 days |
Accordingly, the date of SMA/NPA shall reflect the asset classification status of an account at the day-end of that calendar date. An illustration of such classification is given below:
| Classification as: |
Scenario I |
Scenario II |
| Original Due Date |
5 April 2025 |
2 April 2O25 |
| SMA 0 |
5 April 2025 end of day |
2 April 2025 end of day |
| SMA 1 |
5 May 2025 end of day |
2 May 2025 end of day |
| SMA 2 |
4 June 2025 end of day |
1 June 2O25 end of day |
| NPA |
4 July 2025 end of day |
1 July 2O25 end of day |
C. Upgradation of accounts classified as NPAs
Customer classified as NPAs may be upgraded as 'standard 'only if entire arrears of interest and principal are paid by the customer. With regard to upgradation of accounts classified as NPA due to restructuring, non-achievement of date of commencement of commercial operations (DCCO), etc., the instructions as specified for such cases shall continue to be applicable.
For e.g. if a customer is classified as NPA on 4 July 2025 with an overdue of Rs. 50,000/-, the customer will be upgraded to standard only after receipt of full overdue amount.
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