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What is Special Mention Accounts (SMA)?

  • The classification of Special Mention Accounts (SMA) was introduced by the RBI in 2014, to identify those accounts that has the potential to become an NPA/Stressed Asset.  Logic of such a classification is because some accounts may turn NPA soon. Here, an early identification will help to tackle the problem better.

What is Special Mention Accounts?

  • Special Mention Accounts are those assets/accounts that shows symptoms of bad asset quality in the first 90 days itself.

What is the difference between NPA and SMA?

  • Remember that NPA has a duration of 90 days. On the other hand, the worst type of special mention account (SMA – 2) has less than 90 days’ duration.  
  •  The Special Mention Account identification is an effort for early stress discovery of bank loans. It was introduced as a corrective action plan to contain stress. As per the SMA regulations, banks should identify potential stress in the account by creating a new sub-asset category viz. ‘Special Mention Accounts’ (SMA).

Classification of Special Mention Accounts

  • The Special Mention Accounts are usually categorized in terms of duration. For example, in the case of SMA -1, the overdue period is between 31 to 60 days. On the other hand, an overdue between 61 to 90 days will make an asset SMA -2. In the case of SMA -NF, non-financial indications about stress of an asset is considered.
SMA Sub Category Classification basis
SMA – NF Non-financial (NF) signals of stress


SMA-0 Principal 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- 1 Principal or interest payment overdue between 31-60days.


SMA – 2 Principal or interest payment overdue between 61-90 days.

‘Special Mention’ category of assets is not only on the basis of non-repayment or overdue position but also due to other factors that reflect sickness/irregularities in the account (SMA -NF).

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Hemant Bhatt

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