Special Mention Accounts: SMA-0, SMA-1 and SMA-2
The 90 days before a loan turns NPA, split into three stages. This is where most collection work happens.
A Special Mention Account (SMA) is a loan that is overdue but has not yet become an NPA. RBI requires lenders to spot stress early, from the very first day a payment is missed, and to tag the account SMA-0, SMA-1 or SMA-2 depending on how long it has been overdue.
This is the stage where most recovery telecallers and field agents work. A loan in SMA is still a standard asset. A timely reminder or a realistic payment plan can bring it back before it crosses 90 days and turns into an NPA.
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SMA Categories for Loans
For term loans and other non-revolving loans, the category depends on how long any principal, interest or other amount has been overdue:
SMA-0
Overdue for
1-30 days
Example: EMI due 1 March, unpaid
Roughly the rest of March
SMA-1
Overdue for
31-60 days
Example: EMI due 1 March, unpaid
Roughly April
SMA-2
Overdue for
61-90 days
Example: EMI due 1 March, unpaid
Roughly May
NPA
Overdue for
More than 90 days
Example: EMI due 1 March, unpaid
From about the end of May
| Category | Overdue for | Example: EMI due 1 March, unpaid |
|---|---|---|
| SMA-0 | 1-30 days | Roughly the rest of March |
| SMA-1 | 31-60 days | Roughly April |
| SMA-2 | 61-90 days | Roughly May |
| NPA | More than 90 days | From about the end of May |
SMA Categories for Cash Credit and Overdraft
For revolving facilities like cash credit, the test is different: how long the balance has stayed continuously above the sanctioned limit or drawing power, whichever is lower.
| Category | Balance over the limit continuously for |
|---|---|
| SMA-1 | 31-60 days |
| SMA-2 | 61-90 days |
There Is No SMA-0 for Cash Credit
RBI's framework lists only SMA-1 and SMA-2 for revolving facilities such as cash credit. SMA-0 applies to loans with fixed repayments. This is a favourite exam trap.
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What Lenders Must Do at the SMA Stage
- check_circleFlag the account from the day of default. The overdue status is set in the end-of-day run for the due date itself, not after a grace period.
- check_circleExplain it up front: RBI's rules require the loan contract to include an illustration of how SMA and NPA classification would work, and its impact on the borrower's credit profile.
- check_circleReport large borrowers: lenders report SMA status to RBI's Central Repository of Information on Large Credits (CRILC) for borrowers with total exposure of ₹5 crore and above, monthly, plus a weekly report of defaults.
Words You'll Hear at Work
- DPD (days past due)
- How many days a payment has been overdue. SMA categories are DPD ranges.
- Bucket
- Collections industry word for a DPD range, such as the 0-30 bucket. It is not an RBI term, but the 0-30, 31-60 and 61-90 buckets line up with SMA-0, SMA-1 and SMA-2.
- Standard asset
- A loan that is not an NPA. SMA accounts are still standard assets.
How the DRA Exam Tests This
Expect a range-matching question ("An account overdue for 45 days is classified as" SMA-1) and a trap or two: SMA-0 does not exist for cash credit; SMA is not an NPA; and classification begins on the first day of default, not after 30 days.
Some questions pair SMA with the purpose of the rule: early recognition of stress so that lenders can act before the account becomes an NPA.
FAQs
What is SMA-0, SMA-1 and SMA-2?expand_more
They are the three stages of an overdue loan before it becomes an NPA: SMA-0 for 1-30 days overdue, SMA-1 for 31-60 days and SMA-2 for 61-90 days. After 90 days, the loan becomes an NPA.
Is an SMA account an NPA?expand_more
No. An SMA account is still a standard asset. It becomes an NPA only when the overdue period goes beyond 90 days, or the account is out of order for 90 days in the case of cash credit.
If I miss one EMI by a few days, is my account SMA?expand_more
Yes. RBI requires lenders to classify an account as SMA-0 immediately on default, which includes a payment overdue by even one day. Paying the overdue amount brings it back to regular.
Does SMA status affect my credit score?expand_more
It can. RBI requires the loan contract to explain how SMA and NPA classification affects the borrower's credit profile. Clearing the overdue amount quickly limits the damage.
Next steps
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