1. What is OVERDUE?
When a customer does not pay her scheduled EMI on the due date of a particular
month, she becomes OVERDUE.
Example:
• Parul Didi’s EMI due date for the month of October, 5
th
October, 2024
• Paru Didi does not pay her EMI on 5
th
October, 2024 and instead pays later.
• Paru Didi is now an OVERDUE CUSTOMER.
Customers should avoid becoming overdue as the same affects their Credit
Bureau Record thus, making it difficult for them to avail future loans from any
lending institution.
2. What is DAYS PAST DUE (DPD)?
Each day that a customer is delayed in making the payment of the EMI from the
scheduled due date is DAYS PAST DUE.
Example:
• Parul Didi’s EMI due date for the month of October, 2024 is 5
th
October, 2024.
• Parul Didi does not pay her EMI on 5
th
October, 2024 and pays on 15
th
October, 2024.
• Parul Didi is now 10 DAYS PAST DUE.
Customers should repay every month on time to continue availing benefits from
the lending Companies.
3. What is a SPECIAL MENTION ACCOUNT (SMA)?
When a customer has a part payment due of the principal amount or interest payment or
any other amount that she owes to the lending company, she is classified as a SPECIAL
MENTION ACCOUNT.
Example:
• Parul Didi’s EMI due amount, including interest rate, is Rs 1000/-.
• Parul didi pays Rs. 500/- only.
• Parul didi’s loan account is now classified as a SPECIAL MENTION ACCOUNT.
Customers should avoid falling into the category of Special Mention Account to
maintain good Credit Bureau Record.
4. What is NON-PERFORMING ASSEST (NPA)?
If a customer has not paid the EMI for 90 days, then her account becomes a
NON-PERFORMING ASSET (NPA).
Customers should, at all times, maintain a healthy Credit Bureau Record by paying
their EMIs on time in order to continue to be eligible for future loans from any
lending institutions.
Issued in the interest of Customer awareness and financial well-being.
CUSTOMER EDUCATION GUIDELINE
What is Special Mention Account (SMA) and Non-Performing Asset (NPA)?
The RBI circular DBR.No.BP.BC.45/21.04.048/2018-19 dated 7
th
June, 2019 on ‘Prudential
Framework for Resolution of Stressed Assets’ requires the lenders to recognise incipient
stress in borrower accounts, immediately on default, by classifying them as special mention
accounts (SMA). It is clarified that the intervals are intended to be continuous and
accordingly, the basis for classification of SMA categories shall be as follows:
Loans other than revolving facilities
Loans in the nature of revolving facilities like cash
credit/overdraft
SMA Sub
Basis for classification–
SMA Subcategories
Basis for classification-
categories
Principal
or
interest
Outstanding balance remains
payment
or
any other
continuously in excess of the
amount wholly or
sanctioned limit or drawing
partly
overdue
power, whichever is lower,
for a period of:
SMA 0
Up to 30
days
NA
NA
SMA 1
More than 30 days and
SMA 1
More than 30 days and
Up to 60
days
Up to 60 days
SMA 2
More than 60 days and
SMA 2
More than 60 days and
Up to 90
days
Up to 90 days
Accordingly, the date of SMA/NPA shall reflect the asset classification status of the loan
account, at the day end of that calendar date. An illustration of such classification is as
follows:
SMA 0 - If due date of a loan account is 31
st
March, 2021, and full dues are not
received on this date, the account shall be SMA 0 on day end of 31
st
March, 2021.
SMA 1 - If the account continues to remain overdue, then this account shall get tagged
as SMA-1 upon completion of 30 days of being continuously overdue i.e. 30
th
April, 2021.
SMA 2 - If the account continues to remain overdue, it shall get tagged as SMA-2 on
30
th
May, 2021
NPA – If the account continues to remain overdue further, it shall get classified as NPA
on 29
th
June, 2021
In the above context, it is further clarified that borrower accounts shall be flagged as overdue
by the lending institutions as part of their day-end processes for the due date, irrespective
of the time of running such processes.
These instructions shall be effective 31
st
March, 2022. Accordingly, in respect of any
borrower account, which becomes overdue on or after 31
st
March, 2022, its classification as
NPA shall be based on the account being overdue for more than 90 days.
Issued in the interest of Customer awareness and financial well-being.
