The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (Regional Rural Banks – Income Recognition, Asset Classification and Provisioning) Directions, 2025.
The following has been stated: -
•The Directions prescribe norms for income recognition, asset classification, and provisioning for Regional Rural Banks (RRBs) to ensure transparency and consistency in accounting.
•Loans are classified as Standard, Substandard, Doubtful, or Loss assets, with specific criteria for agriculture, SME, and other sectors, and NPAs are recognized borrower-wise.
•Provisioning norms vary by asset type, with detailed percentages for standard, substandard, doubtful, and loss assets, ensuring realistic coverage of potential loan losses.
•Income from NPAs is recognized only on receipt, with reversal of accrued interest upon NPA classification, while automation of asset classification and provisioning is mandated.
•The Directions repeal prior guidelines, are immediately effective, and empower RBI to issue clarifications; RRBs must comply while following other applicable laws.
•These directions shall come into effect from November 28, 2025.
[Notification No.:RBI/DOR/2025-26/262 DOR.STR.REC.181/21.04.048/2025-26]
