RBI master-direction RBI/DOR/2025-26/357 · 28 Nov 2025
Official title
Reserve Bank of India (Non-Banking Financial Companies – Resolution of Stressed Assets) Directions, 2025 (updated as on July 1, 2026)
Summary
Check the official recordThe Reserve Bank of India establishes a framework for the early recognition, reporting, and time-bound resolution of stressed assets by Non-Banking Financial Companies (NBFCs). The directions apply to deposit-taking NBFCs and non-deposit-taking NBFCs with an asset size of ₹500 crore or more under Part A, and smaller non-deposit-taking NBFCs under Part B. NBFCs must implement Board-approved policies for stress identification, compromise settlements, and technical write-offs. The framework mandates reporting of Special Mention Accounts (SMA) to the Central Repository of Information on Large Credits (CRILC). It defines procedures for resolution plans, including inter-creditor agreements and independent credit evaluations for large exposures. The directions also specify prudential norms for asset classification, provisioning, and income recognition post-restructuring, including specific measures for projects under implementation and accounts impacted by natural calamities.
What you must do
Key dates
Who is affected
Thresholds
Exceptions
If you do not comply
RBI/DOR/2025-26/357
DOR.STR.REC.276/21.04.048/2025-26
November 28, 2025
Previous Versions
Reserve Bank of India (Non-Banking Financial Companies – Resolution of Stressed Assets) Directions, 2025 (updated as on July 1, 2026)
Table of Contents
Chapter I - Preliminary
A. Short title and commencement
B. Applicability
Part A: Resolution of Stressed Assets by a non-deposit taking NBFC with asset size of ₹500 crore or more, or a deposit taking NBFC
Chapter II - Definitions and General Requirements
A. Definitions
B. Board approved policies:
C. Early identification and reporting of stress
D. Disclosures
E. Supervisory Review
Chapter III - Resolution Process
A. Review Period
B. Inter Creditor Agreement
C. Resolution Plan
Chapter IV - Additional Provisioning
A. Delayed Implementation of Resolution Plan – Additional Specific Provisioning
Chapter V - Prudential Norms Applicable to Restructuring
A. Applicability
B. Asset Classification Post Restructuring
C. Additional Finance
D. Asset classification upgrade after satisfactory performance
E. Default by a borrower after monitoring period
F. Provisioning post Restructuring
G. Income Recognition
H. Change in Ownership
Chapter VI - Special Cases of Restructuring
A. Sale and Leaseback Transactions
B. Borrowers who have committed Frauds / Malfeasance / Wilful Default
C. Compromise Settlements and Technical Write-offs
D. [***]
E. Projects Under Implementation
Chapter VI-A – Resolution of Accounts Impacted by Calamities
A. Implementation of Resolution Plan by the NBFCs
B. Ancillary Measures
C. Reporting Requirements
Chapter VII - Government Debt Relief Schemes (DRS)
A. Prudential treatment in respect of Government Debt Relief Schemes (DRS):
Chapter VIII - Prudential Treatment of Instruments Acquired as part of Restructuring
A. Asset classification of instruments acquired as part of restructuring
B. Provisioning in respect of instruments acquired as part of restructuring
C. Valuation of instruments acquired as part of restructuring
D. Income Recognition from instruments acquired as part of restructuring
Chapter IX - Regulatory Exemptions
A. Exemptions from Regulations of Securities and Exchange Board of India (SEBI)
Part B: Resolution of Stressed Assets by a non-deposit taking NBFC with asset size of less than ₹500 crore
Chapter X - Preliminary
A. Directions from Part A applicable to a non-deposit taking NBFC with asset size of less than ₹500 crore
B. Definitions
Chapter XI - General Principles and Prudential Norms for Restructured Advances
A. General instructions for restructuring of advances
B. Asset classification norms
C. Income Recognition Norms
D. Provision on restructured advances
E. Provision for diminution in the fair value of restructured advances
Chapter XII - Prudential Norms for Conversion of Principal into Debt / Equity
A. Asset classification norms
B. Income recognition norms
C. Valuation and provisioning norms
Chapter XIII - Prudential Norms for Conversion of Unpaid Interest into 'Funded Interest Term Loan' (FITL), Debt or Equity Instruments
A. Asset classification norms
B. Income recognition norms
C. Valuation & Provisioning norms
Chapter XIV - Special Measures
A. Trade Relief Measures
Chapter XV - Repeal and Other Provisions
A. Repeal and saving
B. Application of other laws not barred
C. Interpretations
Annex
Introduction
These Directions are issued with a view to providing a framework for early recognition, reporting and time bound resolution of stressed assets. As compromise settlements are a valid resolution plan, these Directions also rationalise and harmonise the instructions on compromise settlements and technical write-offs, in order to provide impetus to resolution of stressed assets in the system. Further, these Directions lay down the consolidated regulatory treatment upon change in the Date of Commencement of Commercial Operations of projects in infrastructure and non-infrastructure (including commercial real estate & commercial real estate- residential housing).
Some of the NBFCs may also be involved in implementation of various forms of Debt Relief Schemes (DRS) announced by State Governments that inter alia entail sacrifice / waiver of debt obligations of a targeted segment of borrowers, against fiscal support. If such schemes are announced frequently, incommensurately, or without due consideration to the principles of financial discipline, they would negatively affect credit discipline and in the long run, may be counter-productive to the credit flow to such borrowers. Apart from the broader implications for the credit discipline and moral hazard issues, DRS also raises certain prudential concerns, which include delay in receipt of dues; mismatch between the claims admitted / submitted by the NBFCs and accepted by the concerned Government as per the terms of the scheme; mandatory requirement of fresh credit by the NBFCs, etc. These Directions also lay down certain broad principles regarding participation of NBFCs in DRS and specifies a model operating procedure, which has been shared with the State Governments for their consideration while designing and implementing such DRS to avoid any non-alignment of expectations of the stakeholders involved, including the Government, lenders, borrowers, etc.
Accordingly, in exercise of the powers conferred by Chapter IIIB of the Reserve Bank of India Act, 1934, the Reserve Bank, being satisfied that it is necessary and expedient in public interest so to do, hereby, issues these Directions hereinafter specified.
Note: The applicability under these Directions is in line with the regulatory structure for NBFCs as set out in the Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025 .
