CAIIB · BFM · Chapter 3

International Equity and Debt Products

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Bank Financial Management — CAIIB.

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One-liners from this chapter

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Q

What is Special Mention Account (SMA)?

A

is an advance that displays early symptoms of stress but has not yet crossed the 90-day overdue line that turns it into an NPA.

Q

SMA-NF?

A

Non-Financial (NF) signals of stress — e.g. operational, governance, audit-related red flags; no overdue requirement.

Q

SMA-0?

A

Principal/interest NOT overdue for more than 30 days BUT account shows incipient stress: delay of 90+ days in (a) stock statement / control statements, (b) credit monitoring or financial statements, (c) non-renewal of facilities based on audited financials.

Q

SMA-1?

A

Principal or interest payment overdue between 31–60 days.

Q

SMA-2?

A

Principal or interest payment overdue between 61–90 days.

Q

No specific provisioning is required for SMA accounts?

A

the framework's purpose is detection and reporting, not loss absorption. Provisioning is triggered when the account actually slips to NPA (>90 days overdue).

Q

Term Loan?

A

Interest and/or instalment remains overdue for more than 90 days.

Q

Cash Credit / Overdraft (CC/OD)?

A

Account remains "out of order" for more than 90 days (see definition below).

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