Reserve Bank of India (Non-Banking Financial Companies – Income Recognition, Asset Classification and Provisioning) Amendment Directions, 2026 · RBI/2026-27/69
RBI notification RBI/2026-27/69 · 29 Apr 2026
RBI notification RBI/2026-27/69 · 29 Apr 2026
Summary
Check the official recordThe Reserve Bank of India amends prudential norms for Non-Banking Financial Companies regarding stressed asset resolution. NBFCs must maintain an additional specific provision of five percent of outstanding debt for borrowers under a resolution plan. For repeated restructuring, NBFCs must add five percent provision for each instance. NBFCs may write back these provisions when a borrower pays at least 20 percent of the debt without slipping into Non-Performing Asset status or requiring further restructuring. Interest income recognition for resolution plan accounts follows an accrual basis, while repeatedly restructured accounts follow a cash basis. These rules apply to accounts managed under the 2025 Resolution of Stressed Assets Directions. The changes take effect on July 1, 2026.
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RBI/2026-27/69 DOR.STR.REC.58/21-04-048/2026-27 April 29, 2026
Reserve Bank of India (Non-Banking Financial Companies – Income Recognition, Asset Classification and Provisioning) Amendment Directions, 2026
Please refer to Reserve Bank of India (Non-Banking Financial Companies – Resolution of Stressed Assets) Amendment Directions, 2026 dated April 29, 2026.
Consequent to the aforesaid Amendment Directions, in exercise of the powers conferred by the sections 45JA, 45L and 45M of the Reserve Bank of India Act, 1934; sections 30A and 32 of the National Housing Bank Act, 1987 and section 3 read with section 31A and section 6 of the Factoring Regulation Act, 2011, and all other laws enabling the Reserve Bank of India (hereinafter called the Reserve Bank) in this regard, the Reserve Bank being satisfied that it is necessary and expedient in the public interest so to do, hereby issues the Amendment Directions hereinafter specified.
These Amendment Directions modify the Directions as under:
i. Paragraph 27A and 27B shall be inserted as under:
27A. If a resolution plan is implemented in adherence to the provisions of Chapter VI-A of Reserve Bank of India (Non-Banking Financial Companies – Resolution of Stressed Assets) Directions, 2025 dated November 28, 2025, borrower accounts which are classified as ‘Standard’ may be retained as such upon implementation. Borrower accounts which may have slipped into NPA between the date of occurrence of the calamity and implementation of the resolution plan, shall be upgraded as ‘Standard’, upon implementation of the resolution plan.
Provided that after implementation of the resolution plan, the subsequent asset classification shall be governed by the criteria laid out in these Directions.
27B. Accounts which are restructured under paragraph 122E to 122L of the Reserve Bank of India (Non-Banking Financial Companies – Resolution of Stressed Assets) Directions, 2025 dated November 28, 2025, where a subsequent restructuring is necessitated under the provisions of Chapter VI-A of the aforesaid Directions, shall continue to be classified as ‘Standard’.
ii. The following shall be inserted in Chapter II – Prudential Norms applicable to all NBFCs:
C2. Additional specific provisioning in case of resolution plan implemented under Chapter VI-A of the Reserve Bank of India (Non-Banking Financial Companies – Resolution of Stressed Assets) Directions, 2025
36D. A NBFC shall make an additional specific provision of five percent of the outstanding debt in respect of borrowers, for whom a resolution plan has been implemented in terms of Chapter VI-A of the Reserve Bank of India (Non-Banking Financial Companies – Resolution of Stressed Assets) Directions, 2025. The additional specific provisions shall be over and above the applicable prudential provisions subject to a ceiling of hundred per cent.
36E. For accounts where repeated restructuring is necessitated in terms of Chapter VI-A of the Reserve Bank of India (Non-Banking Financial Companies – Resolution of Stressed Assets) Directions, 2025, a NBFC shall make additional specific provisioning of five per cent of the outstanding debt for each instance of restructuring made under the aforesaid Directions. This additional specific provisioning shall be over and above the applicable prudential provisions subject to a ceiling of hundred per cent.
36F. The additional specific provisions maintained in terms of paragraph 36D and 36E above may be written back upon the borrower paying at least 20% of the outstanding debt with the NBFC, without slipping into NPA post implementation of the restructuring, and without being subjected to another restructuring.
iii. Para 40A and 40B shall be inserted as under:
40A. Interest income recognition in respect of borrower accounts where resolution plan has been implemented in terms of Chapter VI-A of the Reserve Bank of India (Non-Banking Financial Companies – Resolution of Stressed Assets) Directions, 2025 dated November 28, 2025, shall be on accrual basis.
40B. For accounts specified at paragraph 36E of these Directions, interest income shall be recognized on cash basis.
(Vaibhav Chaturvedi)
Chief General Manager