Base Layer (NBFC-BL): Non-deposit-taking NBFCs with asset size below ₹1,000 crore and certain other categories.

Middle Layer (NBFC-ML): All deposit-taking NBFCs (NBFC-D), non-deposit-taking NBFCs with asset size ≥ ₹1,000 crore, and specified categories (HFCs, IFCs, IDF-NBFCs, SPDs, CICs).

Upper Layer (NBFC-UL): Top-tier NBFCs specifically identified by RBI based on parameters and scoring methodology.

An asset in respect of which no default in repayment of principal or payment of interest is perceived, and which does not disclose any problem or carry more than normal risk attached to the business.

Any amount due to an NBFC under any credit facility shall be treated as 'overdue' if it is not paid on the due date fixed by the NBFC. Flagging is done as part of day-end process for the due date.

NBFC-BL: Interest / instalment overdue for more than 180 days (glide path: >150 by 31.03.2024; >120 by 31.03.2025; >90 days by 31.03.2026).

NBFC-ML / NBFC-UL: Interest / instalment overdue for more than 90 days.

Classification is borrower-wise, not facility-wise — all facilities of a borrower become NPA when any one becomes NPA.

An asset classified as NPA for a period not exceeding:

• 18 months for NBFC-BL
• 12 months for NBFC-ML and NBFC-UL

Also includes assets where terms have been renegotiated / rescheduled / restructured, until 1 year of satisfactory performance under the revised terms.

A term loan, lease asset, hire purchase asset or any other asset which has remained sub-standard for a period exceeding:

• 18 months for NBFC-BL
• 12 months for NBFC-ML / NBFC-UL

Doubtful assets are further sub-aged into: up to 1 year, 1 to 3 years, and more than 3 years — each with progressive provisioning on secured portion (20% / 30% / 50%).

An asset which has been identified as loss by the NBFC, its auditors, or by the RBI during inspection — to the extent not written off; or an asset adversely affected by potential threat of non-recoverability due to erosion / non-availability of security or any fraudulent act on the part of the borrower.

NBFC must flag overdue accounts as part of day-end process for the relevant calendar date.

• SMA-0: Overdue 1–30 days
• SMA-1: Overdue 31–60 days
• SMA-2: Overdue 61–90 days

NPA classification follows on the day-end process after SMA-2 period expires (varies by layer).

NBFC-BL: 0.25% of outstanding.
NBFC-ML: 0.40% of outstanding (incl. microfinance loans).
NBFC-UL: Varies by sub-category — 0.25% (Housing/SME), 0.75% (CRE-RH), 1.00% (CRE other), 2.00% (Teaser housing — reduces to 0.40% after reset), 0.40% (Others incl. Medium Enterprises).

Standard asset provision shall not be reckoned for arriving at Net NPAs and is shown as 'Contingent Provisions against Standard Assets'.

Commercial Real Estate (CRE): Loans where the source of repayment is primarily the lease rentals or sale proceeds from real estate (e.g., office, retail, multi-family residential, industrial / warehouse properties).

CRE – Residential Housing (CRE-RH): Loans extended for residential housing projects (excluding captive consumption), as defined in RBI (NBFC – Credit Facilities) Directions, 2025.

NPAs may be upgraded to 'Standard' only on payment of entire arrears of interest and principal. For borrowers with multiple facilities, upgradation requires payment of all arrears across all credit facilities. For restructured / DCCO accounts, additional conditions of the Resolution of Stressed Assets Directions, 2025 apply.

NBFCs on Ind AS shall hold impairment allowances per Ind AS 109 (ECL), while parallelly computing IRACP provisions as a prudential floor. If ECL is lower than IRACP, the shortfall shall be appropriated to a separate 'Impairment Reserve' from net profit after tax. This reserve is not reckoned for regulatory capital, and withdrawals require RBI's Department of Supervision approval.

Income (interest / discount / hire charges / lease rentals / other charges) on NPAs shall be recognised only when actually realised. Any income recognised before the asset became non-performing and remaining unrealised shall be reversed. For moratorium accounts that remain Standard, accrual basis is permitted.

General provision on funded outstanding (portfolio basis) for Standard project finance exposures:

• Construction Phase: CRE 1.25%, CRE-RH 1.00%, Others 1.00%
• Operational Phase: CRE 1.00%, CRE-RH 0.75%, Others 0.40%

Not applicable for projects where financial closure was achieved on/before 01.10.2025 (unless materially modified later).