The Reserve Bank of India has issued amendment directions for regional rural banks that change how income and expenses must be recognized when a bank acquires a Specified Non-Financial Asset, as a consequential step to its amendments on the resolution of stressed assets. The core change is that accrued but unrealised interest or charges from the extinguished exposure for periods before the asset is acquired cannot be booked as income when the Specified Non-Financial Asset is taken on balance sheet. The amendments also require any such income that was already recognized for a Specified Non-Financial Asset outstanding in a bank's books as of September 30, 2026 to be reversed through the profit and loss account by September 30, 2027, to the extent it remains unrealised on that date. Any income actually received from a Specified Non-Financial Asset must be recognized in the income statement as non-interest or other income in the financial year in which it is realised, while upkeep expenses must be recognized in the year they are incurred. The changes take effect on October 1, 2026.
Reserve Bank of India2026-07-16
Reserve Bank of India amends regional rural bank income recognition rules for specified non-financial assets
The Reserve Bank of India has amended regional rural bank income recognition rules for Specified Non-Financial Assets acquired in stressed asset resolutions. Unrealised pre-acquisition interest or charges cannot be recognized as income, and previously recognized unrealised amounts for such assets outstanding on September 30, 2026 must be reversed by September 30, 2027. The amendments take effect on October 1, 2026.