Amendments to Commercial Banks (Miscellaneous) Directions clarify deferment of option premiums and align with forthcoming regulatory instructions.
Clarification on Option Premium Deferment in Banking Regulations
The Reserve Bank of India has issued Amendment Directions, 2026, to the Reserve Bank of India (Commercial Banks – Miscellaneous) Directions, 2025. The revision pertains to Sub-section D of Chapter IV, which governs the deferment of option premiums in financial contracts.
The amendment clarifies that deferment is permissible only where fully collateralised and disclosed in audited financial statements. It also links compliance to the updated Forthcoming Instructions Directions, ensuring coherence across regulatory instruments. This move eliminates ambiguity in the treatment of derivative-related costs.
Practitioners must ensure that client advisories and contract drafting reflect these updated conditions. The regulatory alignment minimises divergence in interpretation across supervisory departments. Implementation is effective immediately.
