Important Communication on Rate of Interest
Starting July 01, 2024 and after that, borrowers who have completed three years from the date of disbursement will be transitioned to a “Fully Fixed rate of interest” from a “Semi-Fixed Rate of Interest” in line with the Loan Agreement. This means that the interest rate on your loan will remain constant for the duration of the agreed term, providing you with greater predictability and stability in your financial planning. For more details please click here.
NPA Classification Norms
RBI issued notification dated November 12, 2021, includes guidelines on the Standardization of accounts once classified as NPA is as follows:
- A loan account that has any payment which is overdue for 90 days will be tagged as NPA at the day end process
- An NPA account can be considered as standard only if the account holder clears all the pending overdue in full.
- Once any payment is due for 90 days, clearing partial dues will not help to upgrade the loan account as standard.
Explanation:
Date of overdue: The day after the due date of EMI.
Type of Classification:
- Standard Accounts
- Special Mention Account (SMA):
- SMA 0: 0-30 days past the due date
- SMA 1: 31-60 days past the due date
- SMA 2: 61-89 days past the due date
- Non-Performing Asset (NPA): >=90days
Example:
If the due date of a loan account is March 31, 2021, and full dues are not received before the lending institution runs the day-end process for this date, the date of overdue shall be March 31, 2021. If it continues to remain overdue, then this account shall get tagged as SMA-1 upon running the day-end process on April 30, 2021, i.e. upon completion of 30 days of being continuously overdue. Accordingly, the date of SMA-1 classification for that account shall be April 30, 2021.
Similarly, if the account continues to remain overdue, it shall get tagged as SMA-2 upon running the day-end process on May 30, 2021, and if continues to remain overdue further, it shall get classified as NPA upon running the day-end process on June 29, 2021
It is advised to clear all your overdue to avoid any legal action and to maintain a clean repayment record.