RBI has established a uniform 90-day NPA classification rule across all NBFC categories, effective March 31, 2026. Detailed provisioning requirements are also introduced for better asset classification.
RBI Standardizes NPA Classification for NBFCs
The Reserve Bank of India has issued new guidelines to standardize the classification of Non-Performing Assets (NPA) across all categories of Non-Banking Financial Companies (NBFCs). Effective March 31, 2026, a uniform 90-day NPA classification rule will be applied to enhance consistency in asset management across the sector.
In addition to the standardization of NPA classification, the RBI's framework lays out detailed provisioning requirements for various asset classes, including standard, sub-standard, doubtful, and loss assets. This comprehensive approach aims to strengthen the financial stability of NBFCs by ensuring adequate provisioning aligned with the risk profile of the assets.
NBFC operators and compliance professionals must adapt to these changes and update their internal policies and reporting systems to align with the new guidelines, ensuring the seamless application of the standardized NPA classification and provisioning requirements.
Citations
- RBI NPA Classification Guidelines (2026)
