Question

Q5. Consider the following statements:

1. According to RBI norms, if the principal or interest is overdue for one day to 30 days, the account is identified as Special Mention Account – 0 (SMA-0) category.

2. If a loan is not repaid for more than 60 days, it is classified as non-performing asset (NPA).

Which of the above statements are correct?

• A. a) 1 only
• B. b) 2 only
• C. c) Both 1 and 2
• D. d) Neither 1 nor 2

Answer 1

The correct option is A

a) 1 only

• According to RBI norms, if the principal or interest is overdue for one day to 30 days, the account is identified as Special Mention Account – 0 (SMA-0) category.
• If it is overdue for 30 to 60 days, it comes under the SMA-1 category and if it is overdue for more than 60 days, till 90 days, it falls under SMA-2 category. If a loan is not repaid for more than 90 days, it is classified as non-performing asset (NPA)