SMA-0 Signs of Stress
Illustrative list of
signs of stress for categorising an account as SMA-0:
1. Delay of 90 days
or more in (a) submission of stock statement / other stipulated operating
control statements or (b) credit monitoring or financial statements or (c)
non-renewal of facilities based on audited financials.
2. Actual sales /
operating profits falling short of projections accepted for loan sanction by
40% or more; or a single event of non-cooperation / prevention from conduct of
stock audits by banks; or reduction of Drawing Power (DP) by 20% or more after
a stock audit; or evidence of diversion of funds for unapproved purpose; or
drop in internal risk rating by 2 or more notches in a single review.
3. Return of 3 or
more cheques (or electronic debit instructions) issued by borrowers in 30 days
on grounds of non-availability of balance/DP in the account or return of 3 or
more bills / cheques discounted or sent under collection by the borrower.
4. Devolvement of
Deferred Payment Guarantee (DPG) instalments or Letters of Credit (LCs) or
invocation of Bank Guarantees (BGs) and its non-payment within 30 days.
5. Third request for
extension of time either for creation or perfection of securities as against
time specified in original sanction terms or for compliance with any other
terms and conditions of sanction.
6. Increase in
frequency of overdrafts in current accounts.
7. The borrower
reporting stress in the business and financials.
8. Promoter(s)
pledging/selling their shares in the borrower company due to financial stress
No comments:
Post a Comment