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CS Professional · Banking and Insurance - Laws and Practice · Performing and Non Performing Assets

Under the RBI framework, SMA reporting to the Central Repository of Information on Large Credits (CRILC) is required for borrowers with aggregate exposure of Rs 5 crore and above. Gokul Foods has aggregate exposure of Rs 8 crore to lenders and its account becomes SMA-1 in a bank. What is the bank required to do?

The bank must report the SMA status to CRILC. Borrowers with aggregate exposure of Rs 5 crore and above fall under CRILC reporting, which covers SMA categories as well as NPAs, so Gokul Foods with Rs 8 crore exposure and SMA-1 status must be reported.

  1. AReport the SMA status to CRILC, since the exposure is Rs 5 crore or moreCorrect
  2. BReport only if the account becomes NPA
  3. CReport only if exposure exceeds Rs 50 crore
  4. DNot report, as SMA status is an internal matter of the bank

Explanation

Lenders report credit information, including SMA status, on borrowers with aggregate exposure of Rs 5 crore and above to CRILC. Gokul Foods has Rs 8 crore exposure, so SMA-1 status must be reported. Reporting is not limited to NPAs or very large borrowers.

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