Understanding NPAs and SMAs: A Simple Guide for Customers

As a valued customer, we want to ensure you’re well-informed about important banking terms that may affect your financial journey. Two such terms are NPA (Non-Performing Asset) and SMA (Special Mention Account). Don’t worry — they might sound technical, but we’ll make it easy to understand.

What is an NPA?

An NPA refers to a loan or advance for which the principal or interest payment has not been made for more than 90 days.

Example: If your EMI was due on January 1st and not paid by March 31st (90 days), your loan becomes an NPA from April 1st.

Why it matters:

• Your credit score can drop.

• Future loans may become harder to get.

• The bank may start recovery proceedings.

What is an SMA?

Before a loan becomes an NPA, it passes through early warning stages called SMA classifications.

SMA Categories:

SMA-0: 1–30 days overdue – Slight delay in payment
SMA-1: 31–60 days overdue – Moderate delay
SMA-2: 61–90 days overdue – Serious delay

Being tagged SMA-1 or SMA-2 means your loan is at risk. It's a warning to act fast.

How to Avoid SMA and NPA:

• Pay EMIs on time

• Contact your bank if facing difficulty

• Review your loan account regularly

• Respond to bank alerts or notices

What to Do If You’re in SMA or NPA:

• Reach out to your branch

• Discuss repayment options

• Avoid further delays

Final Thoughts: Missing a payment doesn’t make you a defaulter immediately — but delaying without action can lead to consequences. At Quilon Co-operative Urban Bank Ltd., we’re here to help. Contact your nearest branch or call +91 8139086521.