# Classification of Advances — RBI Prudential Norms
All bank advances fall into two broad buckets: Standard Loans and NPA Loans.
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## Standard Loans
| Category | Description |
|---|---|
| Standard / Regular | Performing accounts with no stress signals |
| SMA-0 | Accounts showing stress signals (but not yet overdue) |
| SMA-1 | Overdue between 31 to 60 days |
| SMA-2 | Overdue between 61 to 90 days |
> SMA = Special Mention Accounts — these are early-warning accounts. At 90+ days overdue, an account tips into NPA territory.
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## NPA Loans
Once classified as NPA, the asset degrades through three sub-categories:
| Sub-category | Meaning |
|---|---|
| Substandard | NPA for up to 12 months |
| Doubtful — D1 | Substandard for 1 year; NPA 12–24 months |
| Doubtful — D2 | NPA 24–36 months |
| Doubtful — D3 | NPA beyond 36 months |
| Loss | Identified as uncollectable; write-off recommended |
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## The Progression at a Glance
```
Regular → SMA-0 → SMA-1 → SMA-2 → [90 days] → Substandard → D1 → D2 → D3 → Loss
```
The SMA classification is the banker's early-warning system; the auditor focuses on whether accounts are correctly bucketed at each stage.