meta_id 3115148

On April 29, 2026, the Reserve Bank of India (RBI) issued the Reserve Bank of India (Commercial Banks – Income Recognition, Asset Classification and Provisioning) Amendment Directions, 2026, modifying prudential norms for commercial banks handling stressed assets and resolution plans. The amendment introduces new provisions governing asset classification and provisioning for borrowers whose resolution plans are implemented under Chapter VI-A of the Reserve Bank of India (Commercial Banks – Resolution of Stressed Assets) Directions, 2025. Key changes include: borrower accounts classified as 'Standard' may retain this classification upon resolution plan implementation; accounts that slipped into non-performing asset (NPA) status between the calamity date and plan implementation shall be upgraded to 'Standard' upon implementation; and accounts undergoing repeated restructuring shall continue to be classified as 'Standard'. The amendment establishes additional specific provisioning requirements. Banks must maintain five percent additional specific provision of outstanding debt for borrowers with implemented resolution plans, and five percent for each instance of repeated restructuring, subject to a 100 percent ceiling. These provisions may be written back when borrowers pay at least 20 percent of outstanding debt without slipping into NPA or requiring further restructuring. For non-fund-based facilities or cash credit/overdraft arrangements, provisions can be reversed after one year post-restructuring if the borrower remains current. Interest income recognition provisions are also modified. For resolution plan accounts, interest income recognition shall be on an accrual basis. For accounts undergoing repeated restructuring, interest income recognition shall be on a cash basis. The amendment becomes effective on July 1, 2026, and applies to all commercial banks regulated by the RBI.