The Reserve Bank of India has issued a second amendment to its directions on income recognition, asset classification and provisioning for All India Financial Institutions to set the accounting treatment for Specified Non-Financial Assets acquired under the stressed asset framework. The amendment bars institutions from recognising as income any accrued but unrealised interest or charges from the extinguished exposure that relate to periods before acquisition of the asset. It also requires income received from a Specified Non-Financial Asset to be recognised only when realised, and to be booked as non-interest or other income. Where such pre-acquisition income has already been recognised for a Specified Non-Financial Asset outstanding in an institution's books as of September 30, 2026, the amount must be reversed through the profit and loss account by September 30, 2027 to the extent it remains unrealised on that date. Expenses incurred for the upkeep of a Specified Non-Financial Asset must be recognised in the income statement in the financial year in which they are incurred. The amendment takes effect on October 1, 2026. It follows the Reserve Bank of India's second amendment directions on the resolution of stressed assets issued on the same date.
Reserve Bank of India2026-07-16
Reserve Bank of India amends All India Financial Institutions income recognition directions, bars unrealised income on acquired specified non-financial assets
The Reserve Bank of India amended income recognition rules for All India Financial Institutions to prescribe how acquired Specified Non-Financial Assets must be accounted for. Unrealised pre-acquisition interest or charges from the extinguished exposure cannot be booked as income, and any such amounts already recognised for assets outstanding on September 30, 2026 must be reversed by September 30, 2027 if still unrealised. The changes take effect on October 1, 2026.