This type of SMA category of loans always includes the loans that were not being classified as non-performing assets in line with the Court’s interim stay on recognising new all the bad loans after August. 
The ratio of these loans in default for anywhere between 3 months stood at 20% of the overall book at the end of 2020. This type of best offer document already issued by the bank showed that the share of particular mention is account loans, where every kind of basic repayments are overdue for two months to 3 months.
Every type of trailing close was the corporate sector, where 2.72% of some types of loans were overdue between 61 and 90 days. The same signs of incipient stress were very simply observed in the best Bank of Baroda already offer document, which also showed that the bank’s SMA ratio surged to 21.57%.
However, Punjab National Bank’s situation can be a little more worrying than that of BoB, considering that the total gross NPA ratio stood at 12.99% at last.
Analysts at the Kotak Institutional Equities also observed that while both types of banks had nearly 20% of the gold loan or other types of loans under SMA, PNB carried a very much higher ratio of SMA 1 and some of the loans.
The Reserve Bank of India has already and very earlier warned about this type of impending rise in the system of all the bad assets. Many types of loan losses in the banking sector, as already measured by NPA total gross ratio, can also be doubled to 13.5%.
There are also some fresh concerns on the state of credit quality in the financial system in the light of the ongoing second wave of this Covid-19 pandemic. According to KIE, the cycle is unlikely to be as painful as the corporate NPA cycle.
