The new collections manager has been at the NBFC for three days. On the morning call, the regional head says the X bucket is up and Bucket 1 is flat. The manager nods and writes both down. At her last lender, X bucket and Bucket 1 were the same thing. By lunch she has found three spreadsheets that count days past due three different ways, and nobody on the floor thinks this is strange.
Our view is simple: a delinquency bucket name means nothing until your team writes down how days past due are counted, where each band starts and what moves an account back.
This post explains what common bucket names mean in Indian banking. If a bucket rule is fuzzy, any WhatsApp EMI reminder and NBFC collection software you run will rank and route the wrong accounts. For what to do at each stage once the names are settled, see our guide to collection strategy by DPD bucket.
The same bucket name can mean different things at two lenders
A delinquency bucket is a band of days past due, or DPD. Indian lenders commonly use 30-day bands. Accounts are counted in each band at a fixed cut-off, usually month-end, so management can see how much money is current, slightly late or seriously late.
The bands are common. The names are not. One lender calls current accounts Bucket 0. Another uses Bucket 0 for accounts whose EMI bounced this month. A third calls those fresh bounces the X bucket and starts numbering at Bucket 1 for 31 days and beyond. None of them is wrong. The trouble starts when a report travels between teams, or a new vendor reads your data, and everyone assumes their own meaning.
| Name you may hear | Common meaning | Where it differs |
|---|---|---|
| Current / Bucket 0 | Nothing overdue at cut-off | Some lenders use Bucket 0 for this month’s bounces |
| 0 bucket (collections) | EMI due this cycle and unpaid, usually a bounce | May be counted from the presentation date or the due date |
| X bucket | Fresh delinquency, 1–30 DPD | Some treat it as a separate pool before Bucket 1 |
| Bucket 1, 2, 3 | 1–30, 31–60, 61–90 DPD | Some lenders shift the bands by one bucket |
| 90+ / NPA | Over 90 DPD | The regulatory line, not an internal choice |
Days past due run from the oldest unpaid instalment
The single rule that causes most arguments is how DPD is counted. The usual convention is to count from the due date of the oldest instalment still unpaid, not the latest one. That one choice decides which bucket an account sits in after a part payment.
Here is an illustrative case with round made-up numbers. Say a borrower’s EMI of ₹10,000 falls due on the 5th of each month. The August and September EMIs are both unpaid. On 20 September, the oldest unpaid instalment is 5 August, so DPD is 26 days left in August plus 20 in September, which is 46. The account sits in Bucket 2.
That day, the borrower pays ₹10,000. Under the oldest-instalment rule, the August EMI is cleared. The oldest unpaid instalment is now 5 September, so DPD falls to 15 and the account moves back to Bucket 1. Under a rule that counts the total overdue as a number of EMIs, the result can look different. Neither team is lying, but their month-end numbers will not match.
Two teams can look at the same borrower on the same day and put her in different buckets. That is not a data problem. It is a missing definition.
The 0 bucket and X bucket hold the most curable money
Whatever you call it, the pool of accounts that missed this month’s EMI is where collections pays off most. Many of these borrowers forgot, were short for a few days, or had a mandate bounce for a reason they can fix. A reminder and a payment link often settle it before a call is needed.
That is why the definition matters so much at this end. If your 0 bucket starts counting from the presentation date, and your reminder flow assumes the due date, the first message may go out days late. Our guide to WhatsApp EMI reminders sets out a sequence before and after the due date, and it only works when everyone agrees which date is day zero.
SMA and NPA are the regulator’s buckets, and they sit beside yours
Indian lenders also report special mention accounts. SMA-0, SMA-1 and SMA-2 broadly cover the 1–30, 31–60 and 61–90 DPD bands, and an account more than 90 days overdue is generally classified as a non-performing asset. These classes are set by regulation, not by your collections team. Confirm the current rules, including how and when an account can be upgraded, with your credit and compliance teams.
| DPD band | Typical internal bucket | Regulatory class |
|---|---|---|
| 0 | Current | Standard |
| 1–30 | X bucket or Bucket 1 | SMA-0 |
| 31–60 | Bucket 2 | SMA-1 |
| 61–90 | Bucket 3 | SMA-2 |
| Over 90 | 90+ | NPA |
Your internal buckets can be finer than this, and many are. What they should never do is disagree with the regulatory class on the same account and the same day without a written reason.
Movement words matter as much as bucket names
Bucket reports are really about movement. A few words describe it, and they too vary by lender, so write them down:
- Roll forward: the account moved to a later bucket because another instalment went unpaid.
- Stabilised: the borrower paid enough to stay in the same bucket, but not to move back.
- Rolled back: a part payment moved the account to an earlier bucket.
- Normalised: all arrears were cleared and the account is current again.
Here is an illustrative month. Say 1,000 accounts sit in Bucket 1 on the 1st. By month-end, 600 have cleared all arrears and are normalised, 100 have paid one EMI and stayed in Bucket 1, and 300 have rolled into Bucket 2. The roll-forward rate is 300 ÷ 1,000, or 30%. The normalisation rate is 600 ÷ 1,000, or 60%. Change how DPD is counted and every one of those numbers can shift, which is why the definitions come first. Our collection efficiency and cure rate calculator helps you fix these formulas before anyone reports them.
The case for ignoring internal bucket names
A fair objection goes like this: the regulator’s classes are what the board, the auditors and the rating agencies read, so why spend time on internal names at all? Report SMA and NPA, and let the collections floor call things what it likes.
We agree the regulatory classes are the anchor. But SMA bands are too broad for daily work. A borrower two days late and one twenty-eight days late are both SMA-0, and they need very different treatment. Internal buckets exist to make that difference visible. The answer is not to drop them. It is to define them once, map them to SMA and NPA in a single table, and make every report use that table.
That is where we start with AutoCollect: buckets, policy and scripts are mapped, and a cure-rate baseline is taken before anything goes live. The rest of our thinking is in the AutoCollect guides.
What to do this week
- Write one table that lists each bucket name your teams use, its DPD band and its SMA or NPA class.
- Agree in writing which date is day zero: the due date or the presentation date.
- Confirm that DPD is counted from the oldest unpaid instalment in every report and system.
- Define roll forward, stabilised, rolled back and normalised, and share the definitions with every team that reports them.
Bucket names feel like jargon until two reports disagree in front of the board. One page of definitions, agreed once, saves that meeting and a great many smaller ones.