meta_id 3106015

On April 27, 2026, the Reserve Bank of India (RBI) issued amendment directions to the Reserve Bank of India (Commercial Banks - Transfer and Distribution of Credit Risk) Directions, 2025. The amendments modify provisions governing how commercial banks recognise, measure, and transfer credit risk, particularly concerning stressed loans and asset transfers. The key amendments include: insertion of Paragraph 52A, which requires permitted transferees to recognise and measure acquired loans in accordance with the Reserve Bank of India (Commercial Banks - Asset Classification, Provisioning and Income Recognition) Directions, 2026; deletion of Paragraph 53; insertion of Paragraph 70A, which mandates that stressed loans acquired by banks be classified as purchased or originated credit-impaired financial assets (POCI) and be subject to POCI-related guidelines for provisioning, recognition, measurement, and disclosure; deletion of Paragraph 73; and modification of Paragraph 81 to clarify that when stressed loans are transferred to an Asset Reconstruction Company (ARC) at a price below net book value, banks must debit the shortfall to the profit and loss account in the year the transfer occurs. These amendments align the credit risk transfer framework with updated asset classification and provisioning standards. The amendments apply to commercial banks engaged in transferring or distributing credit risk through permitted transferees and ARCs. The amendments come into force on April 1, 2027, providing banks with a transition period to implement the revised requirements. **Reference:** Reserve Bank of India (Commercial Banks - Transfer and Distribution of Credit Risk) Amendment Directions, 2026, RBI/2026-27/24, April 27, 2026