Question

Which of the following is classified as a Special Mention Account (SMA-0) under the revised guidelines?

A Loans where the principal or interest is overdue for more than 90 days Correct Answer Incorrect Answer
B Loans where the principal or interest is overdue for up to 30 days Correct Answer Incorrect Answer
C Loans with a principal or interest overdue for 31-60 days Correct Answer Incorrect Answer
D Loans with a principal or interest overdue for 61-90 days Correct Answer Incorrect Answer
E Loans that have been written off as loss assets Correct Answer Incorrect Answer

Solution

The Special Mention Account (SMA) classification is used by banks as an early warning system for identifying accounts that may potentially become NPAs. SMA-0 refers to loans where the principal or interest is overdue for up to 30 days. This classification allows banks to take preemptive measures to prevent accounts from slipping into NPA status. The SMA Sub-categories include the following:

  • SMA-0: delay/overdue of up to 30 days
  • SMA-1: delay/overdue of 31-60 days
  • SMA-2: delay/overdue of 61-90 days

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