Payments Banks Financial Statements Presentation and Disclosures Directions 2025

RBI/DOR/2025-26/216 DOR.ACC.REC.No.135/21.04.018/2025-26 November 28, 2025 Previous Versions Reserve Bank of India (Payments Banks – Financial Statements: Presentation and Disclosures) Directions, 2025 (Updated as on April 1, 2026)

Table of Contents Chapter-I Preliminary A. Short title and commencement B. Applicability Chapter-II Balance Sheet and Profit and Loss Account A. Format of the Balance Sheet and Profit and Loss Account B. Notes and instructions for compilation C. Guidance on specific issues with respect to certain Accounting Standards Chapter-III Disclosure in Financial Statements – Notes to Accounts A. General B. Presentation C. Disclosure requirements Chapter-IV Consolidated Financial Statements Chapter-V Other Instructions A. Inter-branch account - provisioning for net debit balance B. Reconciliation of Nostro account and treatment of outstanding entries C. Transfer to / appropriation from Reserve funds D. Provisioning for fraud E. Unreconciled balances F. Deferred tax liability (DTL) on Special Reserve created under Section 36(1) (viii) of the Income Tax Act, 1961 G. Window dressing Chapter-VI Repeal and Other Provisions A. Repeal and saving B. Application of other laws not barred C. Interpretations Annex I Annex II

In exercise of the powers conferred by section 35A of the Banking Regulation Act, 1949, and all other provisions / laws enabling the Reserve Bank of India (‘RBI’) in this regard, RBI being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Directions hereinafter specified.

Chapter-I Preliminary

A. Short title and commencement

1. These Directions shall be called the Reserve Bank of India (Payments Banks – Financial Statements: Presentation and Disclosures) Directions, 2025.

2. These Directions shall come into force with immediate effect.

B. Applicability

3. These Directions shall be applicable to Payments Banks (hereinafter collectively referred to as 'banks' and individually as a 'bank').

Chapter-II Balance Sheet and Profit and Loss Account

A. Format of the Balance Sheet and Profit and Loss Account

4. In terms of the provisions of section 29 of the Banking Regulation Act, 1949, a bank shall in respect of all business transacted by it prepare a balance sheet and profit and loss account as on the last working day of the year or the period, as the case may be, in the Forms set out in the Third Schedule of the Banking Regulation Act, 1949. In exercise of the powers conferred by section 29(4) of the Banking Regulation Act, 1949, the Government of India has specified the Forms in the Third Schedule, vide notification S.O.240(E) dated March 26, 1992, published in the Gazette of India. These are reproduced in Annex I to these Directions.

B. Notes and instructions for compilation

5. A bank shall follow the general instructions for the compilation of balance sheet and profit and loss account as specified in subparagraph (1) below. A bank shall ensure strict compliance with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2021, as amended from time to time, subject to Directions / Guidelines issued by the RBI.

Note: Mere mention of an activity, transaction, or item in instructions for compilation does not imply that it is permitted, and the bank shall refer to the extant statutory and regulatory requirements while determining the permissibility or otherwise of an activity or transaction.

(1) Instructions for compilation of balance sheet

Banks incorporated outside India: Capital

Other Banks (Indian) Authorised Capital (__ shares of ₹ ___ each) Issued Capital (__ shares of ₹ ___ each) Subscribed Capital (__ shares of ₹ ___ each) Called up Capital (__ shares of ₹ ___ each) Less: Calls unpaid Add: Forfeited shares Paid up Capital | Authorised, Issued, Subscribed, and Called-up capital shall be given separately. Calls in arrears will be deducted from Called-up capital while the paid-up value of forfeited shares shall be added thus arriving at the Paid-up capital. Where necessary, items which can be combined shall be shown under one head, for instance ‘Issued and Subscribed Capital’. Notes:

1. The changes in the above items, if any, during the year, say, fresh contribution made by Government, fresh issue of capital, and capitalisation of reserves, etc., shall be explained in the notes.
2. Perpetual Non-Cumulative Preference Shares (PNCPS) included as part of Tier 1 regulatory capital shall be included here. | | Reserves and Surplus | 2 | (I) Statutory Reserves (II) Capital Reserves (III) Share Premium (IV) Revenue and Other Reserves (V) Balance in Profit and Loss Account | Reserves created out of the profits in compliance with section 17(1) (read with paragraph 20 of this Master Direction) or any other section of the Banking Regulation Act, 1949 shall be separately disclosed. The expression ‘Capital Reserves’ shall not include any amount regarded as free for distribution through the Profit and Loss Account. Surplus on revaluation shall be treated as Capital Reserves. Premium on issue of share capital shall be shown separately under this head. The expression ‘Revenue Reserve’ shall mean any reserve other than Capital Reserve. This item will include all reserves, other than those separately classified. The expression ‘reserve’ shall not include any amount retained by way of providing for depreciation, renewals, or diminution in value of assets or retained by way of providing for any known liability. Investment Fluctuation Reserve shall be shown under this head. Includes balance of profit after appropriations. In case of loss the balance shall be shown as a deduction. Notes: Movements in various categories of reserves shall be shown as indicated in the schedule. | | Deposits | 3 | A. (I) Demand Deposits (i) From banks (ii) From others (II) Savings Bank Deposits (III) Term Deposits (i) From banks (ii) From others B. i) Deposits of branches in India ii) Deposits of branches outside India | Includes all bank deposits repayable on demand. Includes all demand deposits of the non-bank sectors. Credit balances in overdrafts, deposits payable at call, overdue deposits, inoperative current accounts, matured time deposits, cash certificates, and certificates of deposits, etc., shall be included under this category. Includes all savings bank deposits (including inoperative savings bank accounts) The total of these two items should match the total deposits shown in the balance sheet. Notes:
3. Interest payable on deposits which is accrued but not due shall not be included but shown under other liabilities.
4. Deposits from a bank will include deposits from the banking system in India, co-operative banks, and foreign banks which may or may not have a presence in India.
5. A bank shall disclose by way of a footnote to this schedule, the amount of deposits against which lien is marked out of the total deposits. (For current and previous year) | | Borrowings | 4 | (I) Borrowings in India (i) RBI (ii) Other banks (iii) Other institutions and agencies (II) Borrowings outside India Secured borrowings included in above | Includes repo, other borrowings, or refinance obtained from RBI. Includes repo, other borrowings, or refinance obtained from banks (including Co-operative banks) and balances in Repo Account. Includes borrowing / refinance obtained from Export-Import Bank of India, NABARD, and other institutions, agencies (including liability against participation certificates-without risk sharing, if any) and balances in Repo Account. Includes borrowings from outside India. This item shall be shown separately. Includes secured borrowings / refinance in India and outside India. Notes:
6. The total of I and II should match the total borrowings shown in the balance sheet.
7. Inter-office transactions shall not be shown as borrowings.
8. Refinance obtained by a bank from RBI and various institutions shall be shown under the head ‘Borrowings’. Accordingly, advances shall be shown at the gross amount on the asset side.
9. The following shall be included here: a) Perpetual Debt Instruments b) Tier 2 Capital Instruments c) Subordinated Debt. | | Other Liabilities and Provisions | 5 | (I) Bills Payable (II) Inter-office adjustments (net) (III) Interest accrued (IV) Others (including provisions) | Includes drafts, telegraphic transfers, traveller’s cheques, mail transfers payable, pay slips, bankers cheques, and other miscellaneous items. The inter-office adjustments balance, if in credit, shall be shown under this head. The bank should first segregate the credit entries outstanding for more than 5 years in the inter-branch account and transfer them to a separate Blocked Account which should be shown under ‘Other Liabilities and Provisions - Others’. While arriving at the net amount of inter-branch transactions for inclusion here, or Schedule 11, as the case may be, the aggregate amount of Blocked Account should be excluded and only the amount representing the remaining credit entries should be netted against debit entries. Only net position of inter-office accounts shall be shown here. Includes interest accrued but not due on deposits and borrowings. Includes net provision for income tax, other taxes like interest tax (less advance payment, tax deducted at source, etc.), deferred tax (if after netting as per AS 22 is a liability), floating provisions, and contingency funds which are not disclosed as reserves, but are actually in the nature of reserves, other liabilities which are not disclosed under any of the major heads such as unclaimed dividend, provisions and funds kept for specific purposes, unexpired discount, outstanding charges like rent, conveyance, etc. Aggregate Net Credit in the Clearing Differences transferred to a separate Blocked Account shall be shown here. Outstanding credit entries in nostro accounts transferred to Blocked Account shall also be shown here. Notes:
10. For arriving at the net balance of inter-office adjustments all connected inter-office accounts shall be aggregated and the net balance only will be shown, representing mostly items in transit and unadjusted items.
11. The interest accruing on all deposits, whether the payment is due or not, shall be treated as a liability.
12. It is proposed to show only deposits under the head ‘deposits’ and hence all surplus provisions for contingency funds, etc., which are not netted off against the relative assets, shall be brought under the head ‘Others (including provisions)’.
13. Provisions towards Standard Assets shall not be netted from gross advances and shown separately as ‘Provisions against Standard Assets’ under ‘Others’ in Schedule 5 of the Balance Sheet.
14. Where any item under the ‘Others (including provisions)’ exceeds one per cent of the total assets, particulars of all such items shall be disclosed in the notes to accounts. | | ASSETS | | | | | Cash and balances with the RBI | 6 | (I) Cash in hand (including foreign currency notes) (II) Balances with RBI (i) in Current Account (ii) in Other Accounts | Includes cash in hand including foreign currency notes. All type of reverse repos with the RBI including those under Liquidity Adjustment Facility shall be presented under sub-item (ii) ‘in Other Accounts’. | | Balances with banks and money at call and short notice | 7 | (I) (i) In India (a) Balances with banks

• in Current Accounts
• in Other Deposit Accounts (b) Money at Call and Short notice
• with banks
• with other institutions (II) Outside India (i) in Current Accounts (ii) in Other Deposit Accounts (iii) Money at Call and Short Notice | Includes all balances with banks in India, except Money at Call and Short Notice as explained below. Balances in current account and other deposit accounts shall be shown separately. Includes the following if they are for original tenors up to and inclusive of 14 days: (i) Money lent in the call / notice money market (ii) Reverse Repo with banks and other institutions The balances in Reverse Repo A/C shall be classified under Schedule 7 under item I (ii) (a) or I (ii) (b) as appropriate. Includes balances held outside India. by the Indian branches of the bank. The amounts held in ‘current accounts’ and ‘deposit accounts’ shall be shown separately. ‘Money at Call and Short Notice’ outside India includes deposits usually classified as per that foreign jurisdiction’s laws, regulations, or market practices as money at call and short notice where such money is lent. | | Investments | 8 | (I) Investments in India in (i) Government securities (ii) Other Approved Securities (iii) Shares (iv) Debentures and Bonds (v) Subsidiaries and / or Joint Ventures (vi) Others (II) Investments outside India (i) Government Securities (including local authorities) (ii) Subsidiaries and / or Joint ventures abroad (iii) Other investments | Includes Central and State Government Securities and Government Treasury Bills. Securities other than Government Securities, which have been specified by the RBI as ‘approved securities’ under section 5(a) of the Banking Regulation Act, 1949, shall be included here. Investments in shares of companies and corporations not included in item (ii) shall be included here. Investments in debentures (as defined by the Companies Act, 2013) and bonds of companies and corporations not included in item (ii) shall be included here. Investments in joint ventures (including associates) shall be included here. Residual investments, if any, like mutual funds, gold, etc. All foreign Government Securities including securities issued by local authorities shall be classified under this head. All investments made in the share capital of joint ventures abroad shall be classified under this head. All other investments outside India shall be shown under this head. | | Advances | 9 | A. (i) Bills purchased and discounted (ii) Cash credits, overdrafts and loans repayable on demand (iii) Term loans B. (i) Secured by tangible assets (ii) Covered by Bank / Government Guarantee (iii) Unsecured C. (I) Advances in India (i) Priority Sectors (ii) Public Sector (iii) Banks (iv) Others (II) Advances outside India (i) Due from banks (ii) Due from others (iii) Bills purchased and discounted (iv) Syndicated loans (v) Others | All interest-bearing loans and advances granted to bank’s own staff, in terms of the licensing conditions and extant operating guidelines for payment banks, as amended from time to time, shall be included here. All loans to bank’s own staff in terms of the licensing conditions and extant operating guidelines for payment banks, as amended from time to time, repayable on demand and short-term loans with original maturity up to one year shall be classified under ‘Cash credits, overdrafts and loans repayable on demand’. A ‘Term Loan’ is a loan which has a specified maturity and is payable in instalments or in bullet form. All Term Loans with maturity in excess of one year shall be classified under this category (i.e., A(iii)) whereas, as explained above short term loans with original maturity up to one year shall be categorised as loans repayable on demand. All advances or part of advances which are secured by tangible assets shall be shown here. Total of ‘A’ should tally with total of ‘B’. Notes: The general instructions for advances granted to bank’s own staff, in terms of the licensing conditions and extant operating guidelines for payment banks, as amended from time to time, are as follows:

1. Advances shall be reported net of provisions made thereon (other than provisions towards Standard Assets). To the extent that Floating provisions have not been treated as Tier 2 capital, they shall also be netted off from advances.
2. Term loans reported shall not include loans repayable on demand.
3. Interest accrued but not due should not be reflected here. Instead, it shall be shown under ‘Interest accrued’ in other assets.
4. Reverse Repo with banks and other institutions having original tenors more than 14 days shall be shown under this Schedule under following head: i. A.(ii) ‘Cash credits, overdrafts and loans repayable on demand’’ ii. B.(i) ‘Secured by tangible assets’ iii. C.(I).(iii) Banks (iv) ‘Others’ (as the case may be) | | Fixed Assets | 10 | (I) Premises (i) At cost as on 31st March of the preceding year (ii) Additions during the year (iii) Deductions during the year (iv) Depreciation to date (II) Other Fixed Assets (including furniture and fixtures) (i) At cost as on 31st March of the preceding year (ii) Additions during the year (iii) Deductions during the year (iv) Depreciation to date | Premises, including land, wholly or partly owned by the bank for the purpose of business including residential premises shall be shown against ‘Premises’. In the case of premises and other fixed assets, the previous balance, additions thereto and deductions therefrom during the year as also the total depreciation written off shall be shown. Furniture and fixtures, vehicles, and all other fixed assets shall be shown under this head. | | Other Assets | 11 | (I) Inter-office adjustments (net) (II) Interest accrued (III) Tax paid in advance / tax deducted at source (IV) Stationery and stamps (V) Non-banking assets acquired in satisfaction of claims (VI) Others | The inter-office adjustments balance, if in debit, shall be shown under this head. Only net position of inter-office accounts shall be shown here. For arriving at the net balance of inter-office adjustment accounts, all connected inter-office accounts shall be aggregated and the net balance, if in debit only shall be shown representing mostly items in transit and unadjusted items. Interest accrued but not due on investments and advances and interest due but not collected on investments will be the main components of this item. As banks normally debit the borrowers’ account with interest due on the balance sheet date, usually there may not be any amount of interest due on advances. Only such interest as can be realised in the ordinary course shall be shown under this head. The amount of advance tax paid, tax deducted at source (TDS), etc., to the extent that these items are not set-off against relative tax provisions shall be shown against this item. Only exceptional items of expenditure on stationery like bulk purchase of security paper, loose leaf or other ledgers, etc., which are shown as quasi-asset to be written off over a period of time shall be shown here. The value shall be on a realistic basis and cost escalation shall not be taken into account, as these items are for internal use. Immovable properties / tangible assets acquired in satisfaction of claims are to be shown under this head. This will include items like claims which have not been met, for instance, clearing items, debit items representing addition to assets or, reduction in liabilities which have not been adjusted for technical reasons, want of particulars, etc. Accrued income other than interest shall also be included here. All non-interest-bearing loans and advances granted to the bank’s staff shall be reported here. Cash Margin Deposit with The Clearing Corporation India Limited (CCIL) shall be shown here. Where any item under ‘Others’ exceeds one per cent of the total assets, particulars of all such items shall be disclosed in the notes to accounts. | | Contingent Liabilities | 12 | (I) Claims against the bank not acknowledged as debts (II) Liability for partly paid investments (III) Liability on account of outstanding forward exchange contracts (IV) Guarantees given on behalf of constituents (i) In India (ii) Outside India (V) Acceptances, endorsements and other obligations (VI) Other items for which the bank is contingently liable | -- Liability on partly paid shares, debentures, etc., will be included in this head. Outstanding forward exchange contracts shall be included here.

Arrears of cumulative dividends, bills rediscounted, commitments of underwriting contracts, and estimated amount of contracts remaining to be executed on capital account and not provided for etc., are to be included here. All unclaimed liabilities (where amount due has been transferred to the Depositors Education and Awareness Fund established under the Depositor Education and Awareness Fund Scheme 2014) shall be shown here. When Issued (‘WI’) securities should be recorded in books as an off-balance sheet item till issue of the security. The off-balance sheet net position in the ‘WI’ market should be marked to market scrip-wise on daily basis at the day’s closing price of the ‘WI’ security. In case the price of the ‘WI’ security is not available, the value of the underlying security determined as per extant regulations may be used instead. Depreciation, if any, should be provided for and appreciation, if any, should be ignored. On delivery, the underlying security may be classified in any of the three categories, viz; ‘Held to Maturity’, ‘Available for Sale’, or ‘FVTPL’, depending upon nature of contractual cash flow and the intent of holding, at the contracted price. Bills for collection

-- Bills and other items in the course of collection and not adjusted will be shown against this item in the summary version only. No separate schedule is proposed. (2) Instructions for compilation of profit and loss account Item Sch Coverage Notes and Instructions for compilation Interest earned 13 (I) Interest / discount on advances / bills Includes interest and discount on all types of loans granted to employees out of the bank’s own funds as provided in the licensing conditions and extant operating guidelines for payment banks to its own employees out of the bank’s own funds. (II) Income on investments Includes all income derived from the investment portfolio by way of interest / discount and dividend. Any discount or premium on the securities under HTM, debt securities under AFS and FVTPL (where contractual cash flow meets criterion for solely payment of principal and interest), shall be amortised over the remaining life of the instrument. The amortised amount shall be reflected in the financial statements under item II ‘Income on Investments’ of Schedule 13: ‘Interest Earned’ with a contra in Schedule 8 : ’Investments’. (III) Interest on balances with RBI and other Inter-bank funds Includes interest on balances with RBI and other banks, call loans, money market placements, etc. (IV) Others Includes any other interest / discount income not included in the above heads. Notes: The balances in Reverse Repo Interest Income Account shall be classified under Schedule 13 (under item III or IV as appropriate). Other Income 14 (I) Commission, Exchange and Brokerage Includes all remuneration on services such as commission on collections, commission / exchange on remittances and transfers, letting out of lockers, commission on Government business, commission on other permitted agency business including consultancy and other services, brokerage, etc., on securities. It does not include foreign exchange income. Payments Banks shall disclose particulars of all such items in the notes to accounts wherever any item under this head exceeds one percent of total income. (II) (III) (IV) Profit on sale of investments Less: Loss on sale of investments Profit on revaluation of investments Less: Loss on revaluation of investments Profit on sale of land, buildings and other assets Less: Loss on sale of land, buildings and other assets Includes profit / loss on sale of securities, furniture, land and building, motor vehicles, gold, silver, etc. Only the net position shall be shown. If the net position is a loss, the amount shall be shown as a deduction. The net profit / loss on revaluation of investments shall be shown under this item. Provision for non-performing investments (NPI) shall not be shown here and instead reflected under Provisions and Contingencies. (V) Profit on exchange transactions Less: Loss on exchange transactions Includes profit / loss on dealing in foreign exchange, all income earned by way of foreign exchange, commission and charges on foreign exchange transactions excluding interest which will be shown under interest head. Only the net position shall be shown. If the net position is a loss, it is to be shown as a deduction. (VI) Income earned by way of dividend etc. from subsidiaries, companies, joint ventures abroad / in India (VII) Miscellaneous income Includes income from bank’s properties, security charges, and insurance etc., and any other miscellaneous income. In case any item under this head exceeds one per cent of the total income, particulars shall be given in the notes. Interest expended 15 (I) Interest on deposits Includes interest paid on all types of deposits including deposits from banks and other institutions. (II) Interest on RBI / inter-bank borrowings Includes discount / interest on all borrowings and refinance from RBI and other banks. (III) Others Includes discount / interest on all borrowings / refinance from financial institutions. All other payments like interest on participation certificates, penal interest paid, etc., shall also be included here. Notes:

1. The balances in Repo Interest Expenditure Account shall be classified under Schedule 15 (under item II or III as appropriate).
2. While acquiring government and other approved securities, banks should not capitalise the broken period interest paid to seller as part of cost of the investment, but instead book it as an expense. Operating Expenses 16 (I) Payments to and provisions for employees Includes staff salaries / wages, allowances, bonus, other staff benefits like provident fund, pension, gratuity, liveries to staff, leave fare concessions, staff welfare, medical allowance to staff, etc. (II) Rent, taxes and lighting Includes rent paid by the banks on buildings, municipal and other taxes paid (excluding income tax and interest tax), electricity, and other similar charges and levies. House rent allowance and other similar payments to staff shall appear under the head ‘Payments to and provisions for employees’. (III) Printing and stationery Includes books and forms and stationery items used by the bank and other printing charges which are not incurred by way of publicity expenditure. (IV) Advertisement and publicity Includes expenditure incurred by the bank for advertisement and publicity purposes including printing charges of publicity material. (V) Depreciation on bank’s property Includes depreciation on bank’s own property, cars and other vehicles, furniture, electric fittings, vaults, lifts, and leasehold properties, etc. (VI) Directors’ fees, allowances and expenses Includes sitting fees, allowances, and all other expenses incurred on behalf of directors. The daily allowance, hotel charges, and conveyance charges, etc., which though in the nature of reimbursement of expenses incurred shall be included under this head. Similar expenses of Local Board members, committees of the Board, etc., shall also be included under this head. (VII) Auditors’ fees and expenses (including branch auditors’ fees) Includes the fees paid to the statutory auditors and branch auditors for professional services rendered and all expenses for performing their duties, even though they may be in the nature of reimbursement of expenses. If external auditors have been appointed by banks themselves for internal inspections and audits and other services, the expenses incurred in that context including fees should not be included under this head but shall be shown under ‘other expenditure’. (VIII) Law charges All legal expenses and reimbursement of expenses incurred in connection with legal services shall be included here. (IX) Postage, Telegrams, Telephones, etc. Includes all postal charges like stamps, telephones, etc. (X) Repairs and maintenance Includes repairs to bank’s property, their maintenance charges, etc. (XI) Insurance Includes insurance charges on bank’s property, insurance premia paid to DICGC, etc., to the extent they are not recovered from the concerned parties. (XII) Other expenditure All expenses other than those not included in any of the other heads like licence fees, donations, subscriptions to papers, periodicals, entertainment expenses, travel expenses, etc., shall be included under this head. In case any particular item under this head exceeds one per cent of the total income, particulars shall be given in the notes. Provisions and Contingencies Includes all provisions made for bad and doubtful debts, provisions for taxation, provisions for non-performing investments, transfers to contingencies, and other similar items.