SMA NPA Classification Customer Awareness TJSB Website

Bank classifies a loan account as Special Mention Account (SMA), Non-Performing Asset (NPA)
immediately in case of default as per the guidelines issued by Reserve Bank of India.
The applicable laws and guidelines and any revision in classification of SMA and NPA from time to time
under the applicable laws, rules, guidelines etc., including the guidelines issued by Reserve Bank of
India/Statutory authorities shall be binding on the borrower.
The classification norms of SMA categories and classification norms of NPA category in case of default of
Term Loan, CC/OD facility, Bill Discounting facility, interest payment is specified hereunder, and such
classifications are subject to change from time to time and shall be binding on the borrower when such
change(s) is effected.
If any account is classified as SMA / NPA, the credit scores (e.g. CIBIL, EXPERIAN, EQUFAX, CRIF) of
borrowers & guarantors will be affected which will also affect their credit rating which may please be
noted.
Identification as SMA (Special Mention Account)
Loans in the nature of

Loans other than Revolving
Category Revolving facilities like Cash
facilities like Term Loans
Credit, Overdraft
Basis for classification – Principal Basis for classification –
Outstanding* balance remains
or interest payment or any
SMA Sub categories continuously in excess of the
other amount wholly or partly
sanctioned limit or drawing power,
overdue whichever is lower, for a period of:
SMA – 0 Upto 30 days --
More than 30 days & upto 60 More than 30 days & upto 60
SMA – 1
days days
More than 60 days & upto 90 More than 60 days & upto 90
SMA – 2
days days
Identification as NPA (Non-Performing Assets)

Loans other than
Loans in the nature of Revolving facilities like Cash
Category Revolving facilities
Credit, Overdraft etc.
like Term Loans
NPA Interest and/or • Cash credit/Overdraft (CC/OD) account is classified as
installment of principal NPA if it is ‘out of order’. In cases where the
remains overdue for a outstanding* balance in the principal operating
period of more than 90 account is less than the sanctioned limit/drawing
days in respect of a term power, the extant instructions, inter alia, stipulate that
loan. the account should be treated as ‘out of order’ if there
are no credits continuously for 90 days as on the date
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Note: of Balance Sheet or credits are not enough to cover
In case of interest the interest debited during the same period. In order
payments in respect of to avoid any ambiguity regarding determination of
term loans, an account ‘out of order’ status of CC/OD accounts on a
will be classified as NPA continuous basis, it is clarified that an account shall be
if the interest applied at treated as ‘out of order’ if:
specified rests remains i. the outstanding balance in the CC/OD account
overdue for more than remains continuously in excess of the sanctioned
90 days. limit/drawing power for 90 days, or
ii. the outstanding balance in the CC/OD account is
In case of direct less than the sanctioned limit/drawing power but
agricultural advances, a there are no credits continuously for 90 days, or
loan granted will be the outstanding balance in the CC/OD account is
treated as NPA, if the less than the sanctioned limit/drawing power but
installment of principal credits are not enough to cover the interest
or interest thereon debited during the previous 90 days period.
remains overdue for • The definition of ‘out of order’ shall be applicable to all
two crop seasons for loan products being offered as an overdraft facility,
short duration crops & including those not meant for business purposes
for one crop season for and/or which entail interest repayments as the only
long duration crops. credits.
• The previous 90 days period for determination of ‘out
of order’ status of a CC/OD account shall be inclusive
of the day for which the day-end process is being run.
• In the case of bills purchased and discounted the
account will be termed as NPA if the Bill remains
overdue for a period of 90 days.
• An account where the regular / ad-hoc credit limits
have not been reviewed or have not been renewed
within 90 days from the due date / date of ad-hoc
sanction will be treated as NPA.
*The outstanding in the account based on drawing power calculated from stock statements older than
three months would be deemed as irregular. A working capital borrowal account will become NPA if
such irregular drawings are permitted in the account for a continuous period of 90 days.
Example: If due date of a loan account is March 31, 2021, and full dues are not received before the
lending institution runs the day-end process for this date, the date of overdue shall be March 31, 2021.
The account shall be classified as SMA-0 and will remain in that category till April 29, 2021. If it
continues to remain overdue, then this account shall get tagged as SMA-1 upon running day-end process
on April 30, 2021 i.e. upon completion of 30 days of being continuously overdue. Accordingly, the date
of SMA-1 classification for that account shall be April 30, 2021. Similarly, if the account continues to
remain overdue, it shall get tagged as SMA2 upon running day-end process on May 30, 2021 and if
continues to remain overdue further, it shall get classified as NPA upon running day-end process on June
29, 2021.
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If the account is tagged as NPA, it shall be reclassified as standard only after entire overdues are repaid
by the borrower. In case of borrowers having more than one credit facility from the Bank, loan accounts
shall be upgraded from NPA to standard asset category only upon repayment of entire arrears of
interest and principal pertaining to all the credit facilities, which may please be noted.
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SMA NPA Classification Customer Awareness TJSB Website

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Bank classifies a loan account as Special Mention Account (SMA), Non-Performing Asset (NPA)

Identification as SMA (Special Mention Account)

Loans in the nature of

Identification as NPA (Non-Performing Assets)

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