RBI Update - Reserve Bank of India (Commercial Banks – Resolution of Stressed Assets) Third Amendment Directions, 2026

The Reserve Bank of India has issued the Reserve Bank of India (Commercial Banks – Resolution of Stressed Assets) Third Amendment Directions, 2026, effective October 1, 2026, amending the Reserve Bank of India (Commercial Banks – Resolution of Stressed Assets) Directions, 2025. The amendment introduces a prudential framework governing the acquisition, valuation, disposal and disclosure of Specified Non-Financial Assets (SNFAs) acquired by Commercial Banks in satisfaction of stressed loan exposures. It defines SNFAs, permits their acquisition only against non-performing exposures on a non-recourse basis, prescribes valuation at the lower of the extinguished exposure’s net book value or the asset’s distress sale value, and requires banks to adopt a policy governing their acquisition and disposal. Further, the amendment mandates disposal of SNFAs within a maximum period of seven years, prohibits their sale back to the borrower or related parties, and prescribes separate disclosure and reporting requirements, with legacy SNFAs required to comply with the framework by September 30, 2027.