To bring cooperative banks closer to the reporting standards of commercial banks, the RBI on December 27, 2019, mandated Urban Co-operative Banks to report credit information, including classification of an account as a special mention account (SMA) to the central repository of information on large credits (CRILC). The CRILC database is used by banks and other financial institutions to share, among themselves and with RBI, the classification status of borrowers. In terms of the instructions, Primary (Urban) Co-operative Banks (UCBs) having total assets of ₹500 crores and above as on 31st March of the previous financial year. Banks are advised to take utmost care about data accuracy and integrity while submitting the data on large credits to the Reserve Bank of India, failing which penal action would be initiated the notification said.
The Special Mention Account (SMA) identification is an effort for the early stress discovery of bank loans. It was introduced as a corrective action plan to contain stress. As per the SMA regulations, banks should identify potential stress in the account by creating a new sub-asset category usually categorized in terms of duration. For example, SMA-1 is a category in which stress with respect to the principal and interest has remained overdue for a period of more than 30 days to 60 days. On the other hand, an overdue between 61 to 90 days will make an asset SMA -2. In the case of SMA -NF, non-financial indications about te stress of an asset is considered.
CRILC – UCBs return will comprise of three sections viz. Section 1: Exposure to Large Borrowers having aggregate exposures (fund-based, non-fund based and investment exposure) of ₹5 crore and above., Section 2: Reporting of Technically / Prudentially Written-off Accounts and Section 3: Reporting of Balance in Current Account, whose (i) balance (either credit or debit) in current account as on reporting date is ₹1 crore and above or (ii) total of credit summation (sum of all credit transactions) during the reporting quarter is ₹5 crore and above or (iii) total of debit summation (sum of all debit transactions) during the reporting quarter is ₹5 crore and above.
“Banks are advised to take utmost care about data accuracy and integrity while submitting the data on large credits to the Reserve Bank of India, failing which penal action would be undertaken”, the notification said.
