Prudential Framework for Resolution of Stressed Assets
Short title and commencement
1. These directions shall be called the Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions 2019.2. These directions shall come into force with immediate effect.
Applicability
3. The provisions of these directions shall apply to the following entities:
- Scheduled Commercial Banks (excluding Regional Rural Banks);
- All India Term Financial Institutions (NABARD, NHB, EXIM Bank, and SIDBI);
- Small Finance Banks; and,
- Systemically Important Non-Deposit taking Non-Banking Financial Companies (NBFC-ND-SI) and Deposit taking Non-Banking Financial Companies (NBFC-D).
Framework for Resolution of Stressed Assets
A. Early identification and reporting of stress
Lenders shall recognise incipient stress in loan accounts, immediately on default, by classifying such assets as special mention accounts (SMA) asper the following categories:
| SMA Sub-categories | Basis for classification – Principal or interest payment or any other amount wholly or partly overdue between |
| SMA-0 | 1-30 days |
| SMA-1 | 31-60 days |
| SMA-2 | 61-90 days |
In the case of revolving credit facilities like cash credit, the SMA sub-categories will be as follows:
| 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-1 | 31-60 days |
| SMA-2 | 61-90 days |
Know More:https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11580&Mode=0
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