SMA-0, SMA-1 and SMA-2 Classification: The 90-Day Countdown Explained with Examples

SMA is the pre-NPA warning ladder. A term loan is SMA-0 from 1 to 30 days overdue, SMA-1 from 31 to 60, SMA-2 from 61 to 90, and an NPA on day 91. Every tag is stamped at day-end on a calendar date, so the countdown is pure date arithmetic — not a month-end judgement call.

Key facts

• RBI's own illustration fixes the arithmetic. For a due date of 31 March 2021: overdue on 31 March, "SMA-1 upon running day-end process on April 30, 2021", SMA-2 on 30 May 2021, and NPA "upon running day-end process on June 29, 2021" (RBI/2021-2022/125, 12 November 2021). That is due date + 30, + 60, + 90.
• There is no SMA-0 for cash credit and overdraft. The revolving-facility table starts at SMA-1. A CC account has no 30-day early-warning rung on the excess test at all.
• Cash credit has three separate out-of-order tests, not one, and two of them can trigger while the balance stays inside the drawing power.
• CRILC reporting starts at ₹50 million — ₹5 crore — of aggregate exposure. Lenders "shall report credit information, including classification of an account as SMA" to CRILC on all such borrowers; the CRILC-Main Report is monthly, and a weekly default report goes in "by close of business on every Friday" (RBI/2018-19/203, Prudential Framework for Resolution of Stressed Assets, 7 June 2019). Every other lender in the system can see the tag before your relationship manager calls.
• The countdown moves faster than a credit review does. YuSight customers report 3x faster decision turnaround, and the same repayment-tracker logic that speeds up a fresh file is what keeps a monitored account's days-past-due current between annual reviews.

What exactly are SMA-0, SMA-1 and SMA-2?

Two tables, because revolving facilities work differently from everything else. Both are from the 12 November 2021 clarification.

Loans other than revolving facilities — term loans, demand loans, bills, EMI-based retail

Revolving facilities — cash credit, overdraft

The absence of an SMA-0 rung for CC/OD is not an oversight. A revolving facility routinely breaches and cures within a month as stock cycles turn; a 30-day rung would fire constantly. The practical consequence is that a cash credit account gets no regulatory early warning in its first 30 days of excess. If you want one, you build it yourself as an internal trigger.

When exactly does each tag get stamped?

Three rules do all the work.

1. "An amount is to be treated as overdue if it is not paid on the due date fixed by the bank." The clock starts on the contractual due date, not the grace-period expiry, not the bounce-return date.
2. The classification date is the calendar date of the day-end run. SMA and NPA classification "shall be done as part of day-end process for the relevant date and the SMA or NPA classification date shall be the calendar date for which the day end process is run."
3. Day-end on the due date already counts. If full dues are not received before the day-end process for the due date itself, the date of overdue is the due date.

So the formula is: overdue date + 30 = SMA-1, + 60 = SMA-2, + 90 = NPA, each stamped at that date's day-end. Verify it against RBI's illustration: 31 March 2021 + 30 = 30 April, + 60 = 30 May, + 90 = 29 June. It matches exactly.

Two corollaries that catch analysts. Calendar days, not working days — weekends and holidays are inside the count. And month-end has no significance whatsoever. An account that reaches day 90 on 29 June is an NPA on 29 June, not on 30 June, and that one-day difference lands in a different quarter's disclosures than a month-end batch process would produce.

The lender also has to make the arithmetic visible to the borrower. The same circular requires "the exact due dates for repayment of a loan, frequency of repayment, breakup between principal and interest, examples of SMA/NPA classification dates" to be specified in the loan agreement, and requires consumer-education material explaining the concepts with examples to be placed on the lender's website and displayed in branches.

Worked timeline 1 — a term loan, with a part payment in the middle

Illustrative. Figures and dates constructed to show the arithmetic; not drawn from any actual account.

ABC Engineering Pvt Ltd holds a ₹2.10 crore term loan. EMI ₹4,20,000, due on the 10th of every month.

The arithmetic, line by line, for the NPA date:

Overdue date (oldest unpaid instalment) 10 March 2026 Days remaining in March after the 10th 21 → 31 Mar = day 21 Full month of April 30 → 30 Apr = day 51 Full month of May 31 → 31 May = day 82 Days into June needed to reach 90 8 → 8 June = day 90 NPA classification date, at day-end 8 June 2026

What the single EMI on 25 March actually bought. Without it, the countdown ran from 10 February and the account would have become an NPA on 11 May 2026 (10 Feb + 90). By clearing the oldest instalment, the borrower reset the days-past-due to the age of the next oldest unpaid amount and pushed the NPA date to 8 June 2026 — 28 days of runway for one EMI.

That is worth understanding for two opposite reasons. It is a legitimate cure mechanic: days-past-due is measured on the oldest amount still outstanding, so clearing arrears in order genuinely rolls the counter back. It is also the exact behaviour a stressed borrower uses to keep an account off the NPA list without ever getting current — one EMI a month against two months' arrears holds the tag at SMA-1 or SMA-2 indefinitely. A repayment tracker that only reports the current bucket will show a stable SMA-1 account. A tracker that reports total arrears alongside the bucket shows arrears compounding while the bucket stands still. The second view is the one that belongs in a monitoring note — the same principle covered in repayment track record analysis.

Worked timeline 2 — a cash credit account that never breaches its limit

Zenith Textiles Pvt Ltd holds a ₹2.00 crore cash credit limit. Drawing power is recomputed monthly from stock and book-debt statements.

Phase 1 — the excess test (limb i)

The excess arises on 1 February because a fresh stock statement cut drawing power below the outstanding — the limit never moved. If nothing had cured, SMA-2 would have followed on 2 April 2026 (1 Feb + 60) and the account would have been out of order on 2 May 2026 (1 Feb + 90). How a stock and book-debt statement moves drawing power is worked through in the drawing power calculator with a worked cash credit example.

Phase 2 — the interest-cover test (limb iii)

The borrower cures the excess on 20 March with a one-off ₹20,00,000 credit and the account sits quietly inside its drawing power. Then, over the 90 days ending 30 July 2026:

Interest debited to the CC account 31 May 2026 ₹1,56,771 30 Jun 2026 ₹1,56,771 31 Jul 2026 ₹1,56,771 Total interest debited in the 90-day period ₹4,70,313 Credits received into the account 14 May 2026 ₹1,20,000 22 Jun 2026 ₹95,000 17 Jul 2026 ₹1,70,000 Total credits in the 90-day period ₹3,85,000 Shortfall (credits − interest debited) −₹85,313

At day-end on 30 July 2026 the account is out of order, and therefore an NPA — even though the outstanding never exceeded the drawing power and the account received credits in all three months.

What are the three out-of-order tests?

An account is out of order if any one of these holds (RBI/2021-2022/125):

The asymmetry nobody plans for. The SMA ladder for revolving facilities is written only against the excess test. Limbs (ii) and (iii) have no SMA-1 or SMA-2 rung of their own — an account can be entirely unremarkable on your SMA report on day 89 and out of order on day 90. Confirm how your supervisor expects limbs (ii) and (iii) to be reflected in SMA tagging and CRILC reporting, since the SMA tables do not address them expressly.

Test (ii) is the one that surfaces borrower flight. A borrower who has shifted turnover to a new lender leaves the old CC account inside its limit with no credits at all. Nothing in a limit-utilisation report looks wrong. What catches it is a rule that reads the transaction stream, not the balance — which is why drawing power monitoring and conduct monitoring have to run together, as set out in drawing power vs ratio covenants in cash credit facilities.

How does an account come back?

Distinguish the two movements, because only one of them has a rule.

Moving down or up the SMA ladder is automatic. SMA is a description of a days-past-due count, not a status someone confers. Clear the oldest arrear and the count falls to the age of the next oldest unpaid amount, exactly as in Timeline 1. There is no minimum holding period, no cooling-off, no approval.

Upgradation from NPA is not automatic. Loan accounts classified as NPA "may be upgraded as 'standard' asset only if entire arrears of interest and principal are paid by the borrower". For a borrower with more than one facility, that means the entire arrears across all facilities — clearing one loan while another stays in arrears does not upgrade anything. The full classification and provisioning consequences downstream of day 91 are set out in IRAC norms explained.

Note also that classification is borrower-level, not facility-level. If ABC Engineering's term loan slips on 8 June, the company's cash credit account goes with it whether or not the CC was out of order on its own tests.

Where the countdown breaks in practice

1. Due dates are not in the agreement. No defined due date, no defined overdue date, no countdown. This is why the 2021 circular made specifying exact due dates, repayment frequency and the principal-interest breakup a compliance requirement in its own right.
2. Month-end batch stamping. A system that classifies once a month cannot produce 8 June as a classification date. It produces 30 June.
3. Drawing power is not recomputed when the stock statement arrives late, so limb (i) never fires even though the account has been in excess for weeks.
4. Part payments are read as cures. One EMI against three months' arrears rolls the bucket back and hides growing total arrears. Report both.
5. The CAM quotes the classification as at spreading date. The tag moves at every day-end; the memo is written once.
6. Limb (iii) is not tested at all because nobody compares credits to interest debited over a rolling 90 days.

Items 3 to 6 are all conduct-data problems rather than judgement problems. A repayment tracker that reads the bank statement transaction stream and the bureau's payment history together will compute days-past-due, total arrears, credits-versus-interest and drawing-power headroom on the same borrower on the same date — which is the whole point of running the comparison rather than reading two reports side by side. The reconciliation logic is covered in bureau vs bank statement reconciliation, and how the resulting history reads on a bureau file in DPD in a CIBIL report. For lenders in a co-lending arrangement, the tag now has to travel between two balance sheets as well — see RBI Co-Lending Directions 2025.

FAQ

What are the SMA-0, SMA-1 and SMA-2 classifications?

They are RBI's three early-warning buckets before an account becomes an NPA. For a term loan, SMA-0 is up to 30 days overdue, SMA-1 is 31 to 60 days, and SMA-2 is 61 to 90 days. For cash credit and overdraft there is no SMA-0 — the ladder starts at SMA-1.

When must an account be reported to CRILC?

When the borrower's aggregate exposure with the lender is ₹50 million — ₹5 crore — and above. The CRILC-Main Report goes monthly, and a separate default report goes weekly, by close of business every Friday. The threshold is on aggregate exposure, so several small facilities can cross it together.

Does SMA status appear in commercial bureau reports?

The days-past-due history that drives SMA certainly does — a commercial bureau file carries the payment grid and asset classification your lender reported. Whether the literal tag "SMA-2" is printed depends on the bureau and the report variant, so check the specific report format you use.

How do you calculate the SMA-1, SMA-2 and NPA dates?

Add 30, 60 and 90 calendar days to the overdue date, and stamp each at that date's day-end. RBI's own illustration runs a 31 March 2021 due date to SMA-1 on 30 April, SMA-2 on 30 May and NPA on 29 June 2021.

Does a part payment reset the SMA clock?

It resets the days-past-due to the age of the oldest amount still unpaid, which can move an account down a rung. It does not stop the countdown — the account keeps ageing on whatever arrears remain, and total arrears can grow while the bucket stays flat.

Can a cash credit account become an NPA while staying within its limit?

Yes. It is out of order if there are no credits at all for 90 continuous days, or if credits over the previous 90 days do not cover the interest debited in that period. Neither test looks at whether the balance breached the limit or drawing power.

Is SMA classification done monthly or daily?

Daily. Classification happens as part of the day-end process for each calendar date, and the classification date is the date of that day-end run. A month-end batch cannot produce a compliant classification date.

What is the difference between overdue and out of order?

Overdue applies to term loans and similar facilities and simply means an amount was not paid on its due date. Out of order applies to cash credit and overdraft and is defined by three separate 90-day tests on excess, absence of credits, and credits failing to cover interest.

How does an SMA account get upgraded?

SMA needs no upgrade decision — the tag follows the days-past-due count automatically. An account that has already become an NPA is different: it returns to standard only when the entire arrears of interest and principal are paid, across all of that borrower's facilities.

Do weekends and holidays count in the 90 days?

Yes. The count is in calendar days. A due date on a Friday and a due date on a Monday produce classification dates exactly 90 calendar days later regardless of how many banking days fall in between.

Key takeaways

• The formula is overdue date + 30, + 60, + 90, stamped at day-end on each of those calendar dates. RBI's illustration confirms it: 31 March 2021 → 30 April → 30 May → 29 June 2021.
• Cash credit has no SMA-0 rung, and two of its three out-of-order tests have no SMA rung at all. Build your own 30-day internal trigger.
• Report total arrears next to the SMA bucket. A borrower paying one EMI a month against two months' arrears sits at SMA-1 forever while the hole gets deeper.
• Limb (iii) — credits against interest debited over a rolling 90 days — is the test least often automated and the one that catches accounts still moving money.
• SMA needs no upgrade decision. NPA does, and it takes the entire arrears across every facility of that borrower.

Run one borrower through the analyzer — [book a live demo](https://yuverse.ai/yusight).