The Reserve Bank of India has amended its directions on income recognition, asset classification and provisioning for commercial banks to prescribe how banks must account for specified non-financial assets acquired following the related changes to the stressed assets resolution framework. The amendment bars banks from recognising as income any accrued but unrealised interest or charges linked to the extinguished exposure for periods before acquisition of a specified non-financial asset. Where a bank has already recognised such income for a specified non-financial asset that remains on its books as of September 30, 2026, the unrealised amount still outstanding on September 30, 2027 must be reversed through the profit and loss account by that date. Any income actually received from a specified non-financial asset must be recorded as non-interest or other income in the financial year in which it is realised, while upkeep costs must be recognised in the financial year in which they are incurred. The amendment takes effect on October 1, 2026.
Reserve Bank of India2026-07-16
Reserve Bank of India amends bank income recognition rules for specified non-financial assets, sets reversal deadline for unrealised income
The Reserve Bank of India has amended commercial bank income recognition rules for specified non-financial assets acquired under the stressed asset resolution framework. Banks cannot recognise accrued but unrealised interest or charges from the extinguished exposure on acquisition, and previously recognised but unrealised amounts for such assets outstanding on September 30, 2026 must be reversed through profit and loss by September 30, 2027. The changes take effect on October 1, 2026.