Reserve Bank of India (Commercial Banks – Financial Statements: Presentation and Disclosures) Fourth Amendment Directions, 2026 – Draft

**Executive Summary** The Reserve Bank of India (RBI) has issued draft Fourth Amendment Directions, 2026, for comments on the Commercial Banks – Financial Statements: Presentation and Disclosures Directions, 2025. These amendment directions, issued under Sections 21 and 35A of the Banking Regulation Act, 1949, modify the disclosure requirements related to 'Exposure to real estate sector' in financial statements. The directions will be effective from July 1, 2026, or earlier if the Second Amendment Directions, 2026 are adopted by a bank in entirety. **Key Points / Main Content** * **Amendment to Disclosure Requirements:** * In 'Chapter-III Disclosure in Financial Statements – Notes to Accounts', sub-subparagraph 10(5)(i) titled ‘Exposure to real estate sector', under Sl. No. i) ‘Direct exposure', item b) ‘Commercial Real Estate' shall stand modified. * This modification concerns the classification and reporting of commercial real estate exposures. * **Categories Under Commercial Real Estate:** * The definition of "Commercial Real Estate" now includes: * Lending secured by mortgages on commercial real estate (office buildings, retail space, multipurpose commercial premises, multifamily residential buildings, multi tenanted commercial premises, industrial or warehouse space, hotels, land acquisition, development, and construction, etc.). * Exposure would also include non-fund based (NFB) limits. * Exposure to Real Estate Investment Trusts (REITs). * Other Commercial Real Estate. * **Effective Date:** * The directions come into force from July 1, 2026. * Alternatively, the directions can be adopted earlier if a bank adopts the Reserve Bank of India (Commercial Banks – Credit Facilities) Second Amendment Directions, 2026 in entirety. **Impact Analysis** **Stakeholder: Commercial Banks** * **Impact:** * Commercial banks need to modify their financial statement disclosures related to real estate exposures as per the new classification. * **Action Required:** * Review and update financial reporting systems and processes to align with the amended disclosure requirements. * Ensure compliance with the new directions from July 1, 2026, or earlier if opting for full adoption of the Second Amendment Directions, 2026.

Key Entities Referenced