Classification of Advances
The guidelines require banks to classify their advances into four broad categories for the purpose of provisioning as follows:
(a) Standard assets
A standard asset is one which does not disclose any problems and which does not carry more than normal risk attached to the business. Such an asset is not a non-performing asset. However as per para 2.1 of Notification dated February 26, 2014, RBI has directed the banks to classify the standard accounts according to their overdue status under Special Monitoring Accounts popularly known as SMA. Under this
| SMA Categories | Basis of Classification |
| SMA-0 | No overdue but sign of incipient stress (as per annexure to the Master Circular on Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dated July 1, 2015 |
| SMA-1 | Overdue between 30 -60 days |
| SMA-2 | Overdue between 60-90 days |
Such classification also serves to be useful for bank officers monitoring as well as audit perspective to check the transactions & methods of keeping these standard at the balance sheet date.