The State Bank of India (SBI) categorised Rashtriya Ispat Nigam (RINL), a public sector steel manufacturer, under the Special Mention Account 1 (SMA-1) category in the second quarter of FY25, sources informed CNBC-TV18.

SBI’s statement clarified that the SMA-1 designation included a long-term government sector client with a fund-based outstanding amount of approximately ₹9,000 crore.

Notably, SBI also stated that the account was subsequently “pulled back,” signaling that the situation may no longer be as financially stressed as initially feared.

SMA-1 accounts are defined as those where payments are overdue by 31-60 days, marking the account as at risk but not yet in default.

This early categorisation allows banks to monitor potential issues and engage in proactive risk management.

RINL’s financial struggles and government support

RINL, which operates a 7.5-million tonne (MT) integrated steel plant in Visakhapatnam, Andhra Pradesh, reported a loss of ₹2,900 crore for FY23.

The total outstanding liabilities have reached approximately ₹35,000 crore.

As part of a recovery effort, the Government of India injected around ₹1,650 crore into RINL in September 2024, allocating ₹500 crore as equity and an additional ₹1,140 crore as a working capital loan, as per media reports.

These funds were intended to stabilise RINL’s operations, allowing the company to continue functioning despite significant cash flow problems that recently led to operational cutbacks, including the temporary shutdown of two of its three blast furnaces.

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