TITLE: India's Reserve Bank Issues Sixth Amendment to Commercial Bank Financial Statement Directions
BODY:
On May 18, 2026, the Reserve Bank of India (RBI) issued the Reserve Bank of India (Commercial Banks – Financial Statements: Presentation and Disclosures) Sixth Amendment Directions, 2026. The amendment modifies the Reserve Bank of India (Commercial Banks – Financial Statements: Presentation and Disclosures) Directions, 2025, which took effect on November 28, 2025.
The RBI exercised powers conferred by Section 35A of the Banking Regulation Act, 1949, to issue these amendments. The changes follow the issuance of the Reserve Bank of India (Commercial Banks – Classification, Valuation, and Operation of Investment Portfolio) Second Amendment Directions, 2026, and address necessary updates to financial reporting standards.
The amendment introduces two substantive modifications to the 2025 Directions. First, it revises the notes and instructions for compilation under Schedule 2(IV) regarding "Revenue and Other Reserves." The updated guidance clarifies that "Revenue Reserve" encompasses any reserve other than a Capital Reserve, including all reserves not separately classified, while explicitly excluding amounts retained for depreciation, renewals, diminution in value of assets, or provisions for known liabilities.
Second, the amendment modifies paragraph 10(3)(vi) to establish a standardised reporting framework for "Movement of provisions for non-performing investments (NPIs)." The new format requires commercial banks to disclose opening balances, provisions made during the year, write-offs or write-backs of excess provisions, and closing balances for NPIs, with figures presented in Indian rupees (₹) crore for both current and previous years.
The Sixth Amendment Directions came into effect immediately upon issuance on May 18, 2026. Commercial banks must apply these amended presentation and disclosure requirements in their subsequent financial statements.