Classifying overdue accounts

This note explains principles in plain words for collections staff. The exact rules are in the RBI's current directions on income recognition and asset classification; Finance applies them. Check the current direction before quoting any detail to a borrower.

In principle

• An account is overdue the day after an instalment is missed.
• As days past due grow, the account moves through special-mention categories (early warning categories reported by lenders) and, at 90 days past due, becomes a non-performing asset (NPA). Our GNPA figure is the share of the book, by value, that is 90+ DPD.
• Classification is done at the borrower level and is checked as of each day, not only at month end.
• An NPA returns to standard only when all arrears are paid. Paying part of the arrears is not enough.

Rescheduling and restructuring

A short rescheduling of instalments under our policy (KB-005) and a restructuring are treated differently. Restructured accounts carry their own classification and provisioning rules. Do not promise a borrower any classification outcome; refer them to the branch manager.

Why it matters to collections

Bringing a loan back under 90 DPD before month end changes the books. The last week of the month is when most of this work is done; plan field visits accordingly.