Updated for 2026 Syllabus Detailed Explanations High-Yield Core Concepts

Bank Promotion Exam Guide

Banking Awareness | Banking Knowledge | for all Bank Exams

Module: General Practice

Q27: In the context of the "Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises," banks are required to identify incipient sickness. Which specific account classification triggers this identification?

A
When the account is classified as SMA-0.
B
When the account is classified as SMA-1.
C
When the account is classified as SMA-2.
D
Only when the account is classified as NPA.
✅ Correct Answer: C
🎯 Quick Answer:
SMA-2.
Concept Definition: "Incipient Sickness" refers to the early signs of stress before an account turns into a Non-Performing Asset (NPA). Regulatory Rule: The framework mandates that banks must identify incipient stress when an account is classified as SMA-2 (Special Mention Account-2). Structural Breakdown: SMA-0: Overdue for 1–30 days.
SMA-1: Overdue for 31–60 days.
SMA-2: Overdue for 61–90 days.
Causal Reasoning: SMA-2 is the final stage before NPA (90 days). Identifying stress at this stage allows the bank and borrower to initiate a Corrective Action Plan (CAP) to prevent the account from turning bad.