Regulatory Alerts2026-07-16
Added · Updated
Reserve Bank of India (Local Area Banks – Income Recognition, Asset Classification and Provisioning) Second Amendment Directions, 2026
The Reserve Bank of India inserts new provisions 119C and 119D into Chapter V regarding income recognition for Specified Non-Financial Assets (SNFA). Banks must not recognize accrued but unrealised interest or charges from periods prior to SNFA acquisition as income, and must reverse any such previously recognized income through the Profit and Loss account by September 30, 2027. Additionally, income received from an SNFA must be recognized as non-interest or other income in the year of realization, with upkeep expenses accounted for in the year incurred. These amendments come into force on October 01, 2026.
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