Special Mention Accounts

Special Mention Accounts are those assets/accounts that show symptoms of bad asset quality in the first 90 days itself. The Special Mention Account identification is an effort for early stress discovery of NBFC loans. It was introduced as a corrective action plan to contain stress. As per the SMA regulations, NBFC should identify potential stress in the account by creating a new sub-asset category viz. ‘Special Mention Accounts’ (SMA).

SMA Sub CategoryClassification basis:
SMA-0Principal or interest payment not overdue for more than 30 days but account showing signs of incipient stress, Delay of 90 days or more in (a) submission of stock statement / other stipulated operating control statements or (b) credit monitoring or financial statements or (c) non-renewal of facilities based on audited financials.
SMA-1Principal or interest payment overdue between 31- 60days.
SMA-2Principal or interest payment overdue between 61-90 days.
SMA Sub Category:
SMA-0Invoices due Upto 30 days from Due-Date.   
SMA-1Invoices due More than 30 days and upto 60 days from Due-Date.   
SMA-2Invoices due More than 60 days and upto 90 days from Due-Date.   

Example: If due date of an Invoice is March 31, 2021, and full dues are not received before the lending institution runs the day-end process for this date, the date of overdue shall be March 31, 2021. If it continues to remain overdue, then this account shall get tagged as SMA-1 upon running day-end process on April 30, 2021 i.e. upon completion of 30 days of being continuously overdue. Accordingly, the date of SMA-1 classification for that account shall be April 30, 2021. Similarly, if the account continues to remain overdue, it shall get tagged as SMA-2 upon running day-end process on May 30, 2021 and if continues to remain overdue further, it shall get classified as NPA upon running day-end process on June 29, 2021.


Below is the basis of Treating a Credit Facility as NPA.

1. An account is treated as NPA if it remains overdue and unpaid for 90 Days from due-date.

2. Also an account is treated as NPA if discount charges/other charges remain unpaid / not serviced in the account for more than 3 months