Lesson 4 · Practitioner · India · 15 min
Collections, NPA Buckets & Foreclosure
Operationalize delinquency with DPD buckets (India SMA/NPA intuition), collections playbooks, and foreclosure math customers actually understand.
Objectives
- ▸Define DPD and map early buckets to actions
- ▸Relate SMA/NPA concepts to product and ops design
- ▸Design collections treatments by bucket
- ▸Calculate what customers owe on foreclosure at a conceptual level
DPD counts how long a contractual payment remains unpaid after due date. It is the backbone of collections strategy and regulatory classification. Bucket policies (X/X1/X2 soft buckets, then B1–B7 style hard buckets) assign treatments: reminders, calls, field, legal, settlement. Capital XB–style LMS examples use Current → X → X1 → X2 → B1 (31–60) → B2 (61–90) → B3+ into NPA/recovery/write-off stages.
- 1–30: reminders, mandate retry, promise-to-pay
- 31–60/90: hard collections, restructuring evaluation
- 90+: NPA recognition thresholds per applicable norms — confirm current RBI rules for your entity type
Policy vs regulation
Internal collection buckets can be finer than regulatory SMA/NPA labels. Keep both: ops buckets for action, regulatory tags for reporting.
Key terms
DPDSMANPACollections bucketPromise to payForeclosurePrepayment penaltyRestructuringProvisioning