Archive · 10 Oct 2026
CEA Urges MSME-Specific Review of NPA Classification Norms
Chief Economic Advisor V Anantha Nageswaran wants loan rules to fit small businesses in India better.
Different businesses may need money at different times and receive payments on different schedules.
Today, overdue loans can be marked in stages at 30, 60 and 90 days.
A loan is generally called an NPA when a payment is more than 90 days late.
Nageswaran said an earlier SMA label can already make it harder for a business.
He wants rules to reflect local business practices instead of using one global approach.
He also called for less paperwork and more training for workers.
He said businesses should make better use of trade agreements, and microfinance lenders should avoid giving too many loans or selling products improperly.
Chief Economic Advisor V Anantha Nageswaran urged the Reserve Bank to review NPA classification norms for MSMEs.
He said rules should reflect Indian business practices and MSMEs’ differing working-capital needs and cash-flow patterns.
Under current rules, overdue loan accounts enter SMA categories at 30, 60 and 90 days; loans generally become NPAs after more than 90 days overdue.
Nageswaran warned that SMA classification can create difficulties for borrowers before accounts are formally classified as NPAs.
He also called for reducing compliance burdens, deregulating, developing skills, using trade agreements and avoiding microfinance over-lending and mis-selling.
- Who
- Chief Economic Advisor V Anantha Nageswaran.
- What
- He urged a review of MSME NPA classification norms and outlined other priorities for MSME growth.
- When
- Friday; the article was published on October 9, 2026.
- Where
- The 21st National Conference of Inclusive Growth organised by Sa-Dhan; the articles do not specify the location.
- Why
- He said MSMEs have varied working-capital needs and cash-flow patterns, and SMA classification can cause difficulties before an account becomes an NPA.
MSME-specific approach
Uniform global framework
How NPA norms should be designed
MSME-specific approach
Nageswaran argued that rules should reflect domestic business practices and the varied cash-flow patterns and working-capital needs of MSMEs.
Uniform global framework
The articles describe a globally uniform framework as the alternative he opposed, but provide no separate advocate's argument for retaining it.
- Speaker
- Chief Economic Advisor V Anantha Nageswaran
- Requested action
- Review MSME NPA classification norms
- Existing SMA categories
- 30, 60 and 90 days overdue
- General NPA threshold
- Interest or principal overdue for more than 90 days
- Conference
- 21st National Conference of Inclusive Growth, organised by Sa-Dhan
- Other MSME priorities
- Deregulation, lower compliance costs, skills development and greater use of trade agreements
- Microfinance priorities
- Prioritise savings and insurance before credit; avoid over-lending and mis-selling
- Publication date
- October 9, 2026
