SMA-0, SMA-1, SMA-2 and NPA explained
RBI asks lenders to flag early stress in loans as Special Mention Accounts (SMA) before they turn bad. For term loans, SMA-0 means principal or interest is overdue by 1-30 days, SMA-1 by 31-60 days, and SMA-2 by 61-90 days. After more than 90 days overdue, the loan is classified as a Non-Performing Asset (NPA).
SMA yaani Special Mention Account: loan mein tension ka shuruaati signal. 1-30 din overdue ho to SMA-0, 31-60 din ho to SMA-1, 61-90 din ho to SMA-2. 90 din se zyada ho jaye to loan NPA ban jata hai.
The categories
| Category | Overdue for |
|---|---|
| SMA-0 | Up to 30 days |
| SMA-1 | 31 to 60 days |
| SMA-2 | 61 to 90 days |
| NPA | More than 90 days |
For cash-credit and overdraft accounts, the SMA-1 and SMA-2 triggers are based on the account staying 'out of order'.
Day-end process and upgrades
RBI's November 2021 clarification requires lenders to flag SMA and NPA status as part of the day-end process, on the exact due-date basis. An NPA can be upgraded to 'standard' only when all arrears of interest and principal are paid. Paying just one EMI doesn't upgrade it. This caught many borrowers and NBFCs by surprise.
NPA sub-categories
After becoming an NPA, a loan is substandard for up to 12 months, then doubtful, and loss when it is considered uncollectible. Each step needs higher provisioning, so lenders fight hardest to stop accounts rolling from SMA-2 to NPA.
Operational takeaway
Because classification is now automatic and date-exact, lenders need systems that compute buckets daily and trigger outreach before thresholds. A loan management system should do this natively. Use the DPD & SMA calculator to check a date.
Common questions
What is SMA-0, SMA-1 and SMA-2?
RBI's early-stress categories: overdue up to 30 days (SMA-0), 31-60 days (SMA-1) and 61-90 days (SMA-2).
When does a loan become NPA?
When interest or principal remains overdue for more than 90 days.
How is an NPA upgraded to standard?
Only when the borrower pays all arrears of interest and principal. A partial payment is not enough.
SMA 1 kya hota hai?
SMA-1 ka matlab loan 31 se 60 din tak overdue hai. Yeh NPA se pehle ka warning stage hai.
Related
ZyroAI products for this: Loan Management System · Voice AI Agents (Ziya).
Written by the ZyroAI team for people building in Indian BFSI. Regulatory rules change, so for binding requirements check the current RBI, NPCI, UIDAI or relevant regulator circular. Last updated 2026-09-24.