RBI master-direction RBI/DOR/2025-26/331 · 28 Nov 2025
Official title
Reserve Bank of India (All India Financial Institutions – Income Recognition, Asset Classification and Provisioning) Directions, 2025 (Updated as on July 01, 2026)
Summary
Check the official recordThe Reserve Bank of India establishes prudential norms for income recognition, asset classification, and provisioning for All India Financial Institutions (AIFIs). These institutions must classify assets as standard or non-performing based on objective recovery records and specific delinquency timelines. The Directions mandate robust management information systems for early distress detection and require board-approved policies for provisioning and asset quality management. AIFIs must maintain specific provisioning levels for standard, substandard, doubtful, and loss assets. The rules also define income recognition principles, requiring cash-basis accounting for non-standard assets. These Directions apply to EXIM Bank, NABARD, SIDBI, NHB, and NaBFID, replacing previous guidelines to ensure consistency and transparency in financial reporting.
What you must do
Key dates
Who is affected
Thresholds
Exceptions
If you do not comply
RBI/DOR/2025-26/331 DOR.STR.REC.No.250/21.04.048/2025-26 November 28, 2025
Previous Versions
A. Short title and commencement B. Applicability C. Definitions
A. Role of the Board B. Prudence in Lending and Consumer Education C. Disclosure Requirements
A. General Instructions on Asset Classification B. Classification as non-performing asset C. Accounts regularised near about the balance sheet date D. Specific cases of asset classification E. Categories of non-performing assets F. Upgradation of loan accounts classified as NPAs
A. General Principles for Provisioning B. Provisions in respect of Standard assets B1. Additional specific provisioning in case of resolution plan implemented under Chapter VI-A of the Reserve Bank of India (All India Financial Institutions – Resolution of Stressed Assets) Directions, 2025 C. Provisions in respect of substandard assets D. Provisions in respect of Doubtful Assets E. Provisions in respect of Loss Assets F. Additional Provisions at higher than prescribed rates G. Provisions under Special Circumstances H. Provisioning Coverage Ratio (PCR)
A. General Principles for Income Recognition B. Reversal of income upon classification as NPA C. Interest application after NPA classification D. Appropriation of recovery from NPAs E. Income recognition in special cases F. Tax treatment in respect of provisions
A. Repeal and saving B. Application of other laws not barred C. Interpretations
Reserve Bank of India ('Reserve Bank') is statutorily mandated to operate the credit system of the country to its advantage. In line with the international practices and as per the recommendations made by the Committee on the Financial System (Chairman Shri M. Narasimham), the Reserve Bank has introduced, in a phased manner, prudential norms for income recognition, asset classification and provisioning for the advances portfolio of regulated entities so as to move towards greater consistency and transparency in the published accounts.
In exercise of powers conferred by Sections 45L and 45M of the Reserve Bank of India Act, 1934, and the Reserve Bank being satisfied that it is necessary and expedient in the public interest and in the interest of financial sector policy so to do, hereby issues these Directions hereinafter specified.
These directions shall be called the Reserve Bank of India (All India Financial Institutions – Income Recognition, Asset Classification and Provisioning) Directions, 2025.
These directions shall come into force with immediate effect.
These Directions shall be applicable to All India Financial Institutions (hereinafter collectively referred to as 'AIFIs' and individually as an 'AIFI') viz. Export Import Bank of India ('EXIM Bank'), National Bank for Agriculture and Rural Development (NABARD), Small Industries Development Bank of India (SIDBI), National Housing Bank (NHB) and National Bank for Financing Infrastructure and Development (NaBFID).
An AIFI shall also follow the prudential guidelines on income recognition, asset classification and provisioning of advances for restructured accounts as prescribed in the Reserve Bank of India (All India Financial Institutions – Resolution of Stressed Assets) Directions, 2025, in addition to these Directions.
(1) 'crop season' for each crop, shall mean the period up to harvesting of the crops raised, as determined by the State Level Bankers' Committee (SLBC) in each State;
(2) 'doubtful asset' shall mean an asset which has remained in the substandard category for a period of twelve months;
(3) 'exposure' shall include all funded and non-funded exposures (including underwriting and similar commitments).
(4) 'long duration crops' shall mean crops with crop season longer than one year;
(5) 'loss asset' shall mean an asset where loss has been identified by an AIFI or internal or external auditors or the inspection conducted by the Reserve Bank of India, but the amount has not been written off wholly by the AIFI;
(6) 'non-performing asset' shall mean an asset, including a leased asset, which has ceased to generate income for an AIFI;
(7) 'overdue' status – any amount due to a AIFI under any credit facility shall be treated as 'overdue' if it is not paid on the due date fixed by the AIFI.
(8) 'provisioning coverage ratio (PCR)' shall mean the ratio of provisioning to gross non-performing assets and indicates the extent of funds kept aside to cover loan losses;
(9) 'security' shall mean tangible security properly charged to the AIFI and will not include intangible securities like guarantees (including State government guarantees), comfort letters, etc.
(10) 'short duration crops' shall mean crops which are not 'long duration' crops;
(11) 'substandard asset' shall mean an asset, which has remained NPA for a period less than or equal to twelve months;
(12) 'unsecured exposure' shall mean an exposure where the realisable value of the security, as assessed by a AIFI / approved valuers / the Reserve Bank's inspecting officers, is not more than ten percent, ab-initio, of the outstanding exposure.
(13) 'wilful defaulter' shall mean the same as defined under the Reserve Bank of India (All India Financial Companies – Treatment of Wilful Defaulters and Large Defaulters) Directions, 2025.
The terms 'micro enterprises', 'small enterprises', and 'medium enterprises' shall have the same meaning as defined in circular FIDD.MSME & NFS.BC.No.3/06.02.31/2020-21 dated July 2, 2020 on 'Credit flow to Micro, Small and Medium Enterprises Sector' as updated from time to time.
The terms 'credit event' and 'default' shall have the same meaning as defined in the Reserve Bank of India (All India Financial Institutions – Resolution of Stressed Assets) Directions, 2025.
The terms 'Commercial Real Estate (CRE)', 'Commercial Real Estate – Residential Housing Sector (CRE - RH)', 'project finance', and 'financial closure' shall have the same meaning as defined in the Reserve Bank of India (All India Financial Institutions – Credit Facilities) Directions, 2025.
All other expressions unless defined herein shall have the same meaning as have been assigned to them under the Banking Regulation Act, 1949 or the Reserve Bank of India Act, 1934, or the Companies Act, 2013, or any statutory modification or re-enactment thereto or other regulations issued by the Reserve Bank or the Glossary of Terms published by the Reserve Bank or as used in commercial parlance, as the case may be.
(1) the policy of income recognition shall be objective and based on record of recovery rather than on any subjective considerations;
(2) policy for making provisions for standard assets at rates higher than the regulatory minimum, based on evaluation of risk and stress in various sectors;
(3) guidelines for appointment of external agencies for stock audit and valuation of collateral.
