Banking, mapped
MapGlossary
What kills the spread: NPAs·5 of 5
  1. What an NPA is (the 90-day rule)→
  2. SMA stress buckets (SMA-0/1/2)→
  3. Asset classification (standard → loss)→
  4. Provisioning→
  5. IRAC norms

What kills the spread: NPAs

IRAC norms: RBI's rulebook for bad loans

RBI's uniform rulebook for when banks must stop booking interest on bad loans and provide.

Why it matters

IRAC is the framework auditors and RBI inspectors check you against — for credit, audit, or compliance, knowing it is knowing the rules of the game.

A worked example

On a ₹1 cr loan at 10%, the day it turns NPA the bank not only stops booking ₹10 lakh of interest but must reverse interest already counted.

The picture

IRAC normsInterest reversedStandard → lossladderProvisioningincome recognition: stop booking interest on NPAsasset classification: grade the loansets

What it leads to

IRAC is the umbrella over the whole NPA cluster — SMA stages, the 90-day trigger, classification, and provisioning are all its consequences.

Where it sits in the map

Assetclassification(standard → loss)Assetclassification(standard → loss)ProvisioningWhat an NPA is(the 90-day rule)SMA stressbuckets(SMA-0/1/2)SMA stressbuckets(SMA-0/1/2)IRAC norms

Follow the causation

this is the classification ladder IRAC definesAsset classification (standard → loss)→this is the provisioning IRAC mandatesProvisioning→this is the 90-day trigger IRAC setsWhat an NPA is (the 90-day rule)→this is the early-warning stage IRAC defines before NPASMA stress buckets (SMA-0/1/2)→