The Reserve Bank of India has issued amendment directions for rural co-operative banks under its income recognition, asset classification and provisioning framework, following the same-day amendment to the stressed assets resolution directions. The change introduces a specific income recognition regime for acquired specified non-financial assets (SNFA) and bars banks from recognising as income any accrued but unrealised interest or charges from the extinguished exposure for periods before the SNFA was acquired. Where such income has already been recognised for any SNFA outstanding in a bank's books as of September 30, 2026, it must 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 an SNFA must be recorded in the income statement as non-interest or other income in the financial year in which it is realised, while expenses for the upkeep of an SNFA must be recognised in the year they are incurred. The amendment takes effect on October 1, 2026.
Reserve Bank of India2026-07-16
Reserve Bank of India amends rural co-operative bank income recognition rules for acquired specified non-financial assets
The Reserve Bank of India has amended rural co-operative bank income recognition rules to set accounting treatment for acquired specified non-financial assets. Banks cannot book accrued but unrealised interest or charges from the extinguished exposure as income on acquisition, and previously recognised unrealised amounts for SNFAs outstanding on September 30, 2026 must be reversed by September 30, 2027. The changes take effect on October 1, 2026.