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Classification on Loan A/c

Classification of Your Loan A/c Based on the Repayment

Bank shall recognise & Classify your Loan A/c based on your repayment.

The Loan A/c will be classified as STANDARD (STD), where the payment of the Principal or interest payment or any other amount is regular without any delay i.e. repayment is done within the due date as per the Sanction terms/Loan agreement.

In event of default i.e. delay of repayment, the Bank will classify the loan account as special mention accounts (SMA) as per the following categories:

Loans other than revolving facilities

Loans in the nature of revolving facilities like cash credit/overdraft
SMA Sub-categories Basis for classification – 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-0 Up to 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 60 days and upto 90 days

Non-performing Assets: A non-performing asset (NPA) is a loan or an advance where;

  • Interest and/ or instalment of principal remains overdue for a period of more than 90 days in respect of a term loan.
  • The account remains ‘out of order’ as indicated at paragraph viii below, in respect of an Overdraft/Cash Credit (OD/CC).
  • The bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted.
  • The instalment of principal or interest thereon remains overdue for two crop seasons for short duration crops,
  • The instalment of principal or interest thereon remains overdue for one crop season for long duration crops,
  • The amount of liquidity facility remains outstanding for more than 90 days, in respect of a securitisation transaction undertaken in terms of the Reserve Bank of India (Securitisation of Standard Assets) Directions, 2021.
  • in respect of derivative transactions, the overdue receivables representing positive mark-to-market value of a derivative contract, if these remain unpaid for a period of 90 days from the specified due date for payment.
  • out of order’ an account shall be treated as ‘out of order’ if:
    • the outstanding balance in the CC/OD account remains continuously in excess of the sanctioned limit/drawing power for 90 days, or
    • the outstanding balance in the CC/OD account is less than the sanctioned limit/drawing power but there are no credits continuously for 90 days, or the outstanding balance in the CC/OD account is less than the sanctioned limit/drawing power but credits are not enough to cover the interest debited during the previous 90 days period.

In case of interest payments, banks will classify an account as NPA only if the interest due and charged during any quarter is not serviced fully within 90 days from the end of the quarter.


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