The RBI has published new Second Amendment Directions focused on income recognition, asset classification, and provisioning for Small Finance Banks, aiming for better compliance.
RBI Updates Directions for Small Finance Banks
On July 16, 2026, the Reserve Bank of India issued the Second Amendment Directions for Small Finance Banks, addressing income recognition, asset classification, and provisioning in the sector.
These amendments build upon earlier guidelines aimed at stress asset resolution and are implemented under relevant sections of the Banking Regulation Act. This effort is aimed at promoting better financial health among Small Finance Banks.
Practitioners should inform their clients about these significant updates to ensure operational policies align with regulatory standards, thereby strengthening the overall banking framework.
Citations
- Reserve Bank of India (Small Finance Banks – Income Recognition, Asset Classification and Provisioning) Second Amendment Directions (2026)