Regulatory Alerts2026-07-16
Added · Updated
Reserve Bank of India (Small Finance Banks – Income Recognition, Asset Classification and Provisioning) Second Amendment Directions, 2026
The directions insert new provisions into Chapter V regarding income recognition for the acquisition of Specified Non-Financial Assets (SNFA). Banks must not recognize accrued but unrealized interest or charges from extinguished exposures prior to SNFA acquisition as income upon acquisition. Any such income already recognized in books as of September 30, 2026, must be reversed through the Profit and Loss account by September 30, 2027, to the extent it remains unrealized. Income received from an SNFA is to be recognized as non-interest or other income in the year of realization, with upkeep expenses accounted for in the year incurred.
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