Software & Automation

DPD, SMA and NPA, Explained Simply

Every lender tracks overdue loans in the same buckets. Here is what each one means, in plain words.

Software & AutomationBy EmergeScale Team27 September 20265 min read

The short answer

DPD, or days past due, counts how many days a payment is overdue. Under RBI norms for lenders, an account is SMA-0 when overdue up to 30 days, SMA-1 from 31 to 60 days, SMA-2 from 61 to 90 days, and becomes a non-performing asset (NPA) when overdue for more than 90 days.

Contents

The buckets at a glance
Why it has to be calculated every day
Questions people ask

The buckets at a glance

These are the standard special mention account categories used by Indian lenders.

	Category	Days overdue
SMA-0	Up to 30	Early delay, often a timing issue
SMA-1	31 to 60	A pattern is forming
SMA-2	61 to 90	Serious risk of default
NPA	More than 90	Non-performing, provisioning applies

Why it has to be calculated every day

Classification is based on the oldest unpaid amount, and it changes as days pass and payments arrive. A loan can move from SMA-1 to SMA-2 overnight. Collections teams need that movement in front of them the same morning to prioritise calls and visits.

Upgrading matters too. Current RBI practice is that an NPA account is upgraded to standard only when all arrears are cleared, not when a single instalment is paid. A system that gets this wrong will overstate the health of your book.

Questions people ask

Is DPD the same across all lenders?

The counting is the same idea everywhere: days since the oldest amount fell due and remained unpaid. Always check the latest RBI circulars for your category of lender, as norms are updated from time to time.

Does a partial payment reset DPD?

Not by itself. DPD tracks the oldest unpaid due, so a payment only reduces DPD if it clears that oldest amount.

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