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.

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). Due Date is the date specified in the Repayment Schedule on which the instalment is due to be paid.

Classification as SMA and NPA

The following illustration covers the concepts of date of overdue, SMA classification, NPA classification and upgradation.

Loans Other Than Revolving Facilities

Cash Credit/Overdraft

SMA -0

Up to 30 Days

SMA-1

More than 30 days and upto 60 days

SMA-2

More than 60 days and upto 90 days

NPA

More than 90 days

Illustrative Example

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 2025
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 2025 End of Day
NPA	4 July 2025 End of Day	1 July 2025 End of Day

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.