Regulatory Alerts2026-07-16
Added · Updated
Reserve Bank of India (Non-Banking Financial Companies Income Recognition, Asset Classification and Provisioning) Third Amendment Directions, 2026
These Amendment Directions modify the Reserve Bank of India's prudential norms for all Non-Banking Financial Companies (NBFCs) regarding income recognition for Specified Non-Financial Assets (SNFA). Effective October 01, 2026, NBFCs are prohibited from recognizing accrued but unrealized interest or charges from extinguished exposures as income upon SNFA acquisition. Any such income recognized for SNFAs outstanding as of September 30, 2026, must be reversed through the Profit and Loss account by September 30, 2027, if still unrealized. Furthermore, income received from an SNFA must be recognized as 'non-interest / other income' in the financial year it is realized, and expenses for SNFA upkeep must be accounted for in the financial year they are incurred.