Ekagrata Finance Private Limited
Registered Office: Nova Miller, #333, Thimmaiah
Road, Vasanth Nagar, Bengaluru- 560052
CIN: U67110KA2018PTC119435
Phone:+91 80471 85299
Email: support@ekagratafinance.com
Website: www.ekagratafinance.com

Customer Education Literature Document-V1/2022

This Customer Education Literature issued to create awareness amongst the borrowers on the concepts of date of overdue, SMA and NPA classification of loan and upgradation in line with the Master Circular on Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances (IRACP norms) dated October 1, 2021 read with RBI clarification circular issued on November 12, 2021 and February 15, 2022.

What is due and due date?

Due indicate the principal & interest (EMI) and any charges levied on the loan account which are payable. EMI Due date indicates the date on which/within the due amount has to be paid as stipulated and agreed as per contracted loan sanction terms and repayment schedule.

What is Overdue/default?

Overdue indicates the payable amount (EMI and Charges, if any) which have not been not paid on the stipulated due date as per the terms of the credit sanction.

When Lending Institutions will classify any loan as Special Mention Account (SMA) and Non Performing Asset (NPA) with Illustrations?

As per the Reserve Bank of India (RBI) guidelines, Lending institutions will recognize the incipient stress in loan accounts, immediately on default, by classifying them as Special Mention Accounts (SMA). The basis of classification of SMA / NPA category shall be as follows:

Lone other than resolving facilities Loans in the nature of revolving facilities like cash credit/overdraft
SMA Sub-categories Basis for classification - Principal or interest payment or any other amount wholly or partly overdue SMA Sub-categories Basis for classification -Outstanding balance remains continuously in excess of the sanctioned limit or drawing power, whichever is lower, for a period of
SMA-0 Upto 30 days    
SMA-1 More than 30 days and upto 60 days  SMA-1 More than 30 days and upto 60 days
SMA-2 More than 60 days and upto 90 days  SMA-2 More than 60 days and upto 90 days

Non-performing Asset:

The loan account shall be classified as Non-Performing Asset (NPA) when Installment or interest amount payable, if any remains overdue for a period of more than 90 days.

Illustrations: (This Illustration is for reference purpose only)

Mr. A (Borrower) has taken loan of X amount due date of which falls 5th day of every month ie. May 5, 202X, June 5, 202X, July 5, 202X, August 5, 202X and so on, then the SMA/NPA classification for the respective due amount will be done upon running day end processes.

The indicative SMA/NPA classification of the amount falling due on May 5, 202X shall be as follows:

Due date of payment Payment date Payment covers Days overdue SMA/NPA
May 5, 202X May 5, 202X May 5, 202X Entire dues up to May 5, 202X NIL NA
June 5, 202X June 5, 202X June 5, 202X No payment or Part payment of dues of June 5, 202X Upto 30 days SMA-0
July 5, 202X - No full payment of June 5, 202X and payment for July 5, 202X is also due at EOD July 5, 202X More than 30 days and upto 60 days SMA-1
August 5, 202X - No full payment of earlier dues and payment for August 5, 202X is also due at EOD July 5, 202X More than 60 days and upto 90 days SMA-2
September 5, 202X - No full payment of earlier dues and payment for September 5, 202X is also due at EOD July 5, 202X More than 90 days NPA

When loan will be classified as Standard once classified NPA (Upgradation of Accounts classified as Non-Performing Asset (NPA)?

The loan account classified as NPA can be upgraded as “Standard” only if the entire arrears of interest, principal and any other amount due are paid in full and there is no amount due upon running day end process.

Whom can I contact in case of queries or further assistance on this ?

You can visit https://www.ekagratafinance.com/contact.html and submit your queries via email or call

What is the impact on the borrower if the account is slipped to SMA/NPA?

As per the regulatory guidelines, the Lending Institutions has to report the account as SMA/NPA to Credit Information Companies (CICs) etc. from time to time, which impacts the credit history of the borrower.

For detailed guidelines on asset classification and provisioning, please refer to the RBI's Master Circular - Prudential Norms on IRACP pertaining to Advances dated October 1, 2021. The above asset / SMA classification norms are subject to changes as per regulatory instructions issued from time to time.