With a view to increasing awareness among the borrowers, Reserve Bank of India has advised Banks to put in place information for consumer education on websites, with respect to various loan related concepts such as date of overdue, SMA and NPA classification and up gradation etc. Reserve Bank of India has stipulated various changes to be made to the Loan Documents as below at the time of sanction of the loan and also at the time of subsequent changes, if any.
1. Exact due dates for repayment of a loan (Newly added to loan document)
2. Frequency of repayment of loan, (Already included in loan document)
3. Breakup between principal and interest, (Newly added to loan document)
4. Examples of SMA/NPA classification dates, etc. (Newly added to loan document)
5. In cases of loan facilities with moratorium on payment of principal and/or interest, the exact date of commencement of repayment shall also be specified in the loan agreements. (Newly added to loan document)
Accordingly, your bank has made necessary changes to the Loan document to be executed at the time of availment of loan from our bank.
| Term Loan (Loans other than revolving facilities) |
Working capital limits in the form of
Cash Credit / Overdraft (Loans in the nature of revolving facilities) |
||
|---|---|---|---|
| SMA Subcategories | Basis for classification – Principal or interest payment or any other amount wholly or partly overdue | SMA Subcategories | Basis for classification – Outstanding balance remains continuously in excess of the sanctioned limit or drawing power, whichever is lower, for a period of: |
| SMA-0 | Up to 30 days | ||
| SMA-1 | More than 30 days and up to 60 days | SMA-1 | More than 30 days and up to 60 days |
| SMA-2 | More than 60 days and up to 90 days | SMA-2 | More than 60 days and up to 90 days |
Example of determining date of overdue
If due date of a loan account is March 31, 2021, and full dues are not received before the bank runs the day-end process for this date, the date of overdue shall be March 31, 2021.
Example of determining date of classifying account under SMA-1 category
If loan 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.
Example of determining date of classifying account under SMA-2 category
If loan continues to remain overdue, it shall get tagged as SMA-2 upon running day-end process on May 30, 2021
Example of determining date of classifying account under NPA category
If loan remain overdue further, it shall get classified as NPA upon running day-end process on June 29, 2021.
