Module: General Practice
Q23: Regarding the "Framework for Revival and Rehabilitation of MSMEs" (directed by RBI), consider the following statements about the Special Mention Account (SMA) classification for identifying incipient stress:
SMA-0 is classified when principal or interest is overdue for 1 to 30 days.
SMA-1 is classified when principal or interest is overdue for 31 to 60 days.
SMA-2 is classified when principal or interest is overdue for 61 to 90 days.
Which of the statements given above are correct?
SMA-1 is classified when principal or interest is overdue for 31 to 60 days.
SMA-2 is classified when principal or interest is overdue for 61 to 90 days.
Which of the statements given above are correct?
✅ Correct Answer: D
Before an account turns NPA (at 90 days), banks must track stress using SMA categories under the MSME Framework.
SMA-0 is classified when Principal or Interest is overdue for 1 to 30 days (indicating incipient stress). SMA-1 is classified when Principal or Interest is overdue for 31 to 60 days.
SMA-2 is classified when Principal or Interest is overdue for 61 to 90 days.
The significance of this classification is that if an MSME account falls into SMA-2, the bank must strictly initiate a "Corrective Action Plan" (CAP) under the framework to prevent it from slipping into NPA.
SMA-0 is classified when Principal or Interest is overdue for 1 to 30 days (indicating incipient stress). SMA-1 is classified when Principal or Interest is overdue for 31 to 60 days.
SMA-2 is classified when Principal or Interest is overdue for 61 to 90 days.
The significance of this classification is that if an MSME account falls into SMA-2, the bank must strictly initiate a "Corrective Action Plan" (CAP) under the framework to prevent it from slipping into NPA.