The Reserve Bank of India has announced new directives for Small Finance Banks regarding income recognition and asset classification.
RBI Issues Second Amendment Directions for Small Finance Banks
The Reserve Bank of India (RBI) on July 16, 2026, published the Second Amendment Directions for Small Finance Banks (RBI/2026-27/196, DOR.STR.REC.161/21-04-048/2026-27). These guidelines are intended to enhance the processes for income recognition and asset provisioning.
The revised directions are aligned with the resolve to improve the resolution of stressed assets in the banking sector. Small Finance Banks are expected to adapt their practices to comply with these amendments effectively.
Legal practitioners advising Small Finance Banks should review these amendments closely, as adherence will significantly affect operational compliance and the overall health of these financial institutions.
Citations
- RBI/2026-27/196 DOR.STR.REC.161/21-04-048/2026-27