Reserve Bank of India (Local Area Banks – Financial Statements: Presentation and Disclosures) – Amendment Directions, 2026

**Executive Summary** This document, issued by the Reserve Bank of India (RBI), outlines the "Amendment Directions, 2026" regarding financial statement presentation and disclosures for Local Area Banks (LABs). It modifies the existing "Directions, 2025" by adding requirements for disclosing exposures to related parties. The amendments become effective on April 1, 2026, although banks may choose to implement them earlier. **Key Points / Main Content** * **Amendment Overview:** * The document amends the "Reserve Bank of India (Local Area Banks - Financial Statements: Presentation and Disclosures) Directions, 2025." * The amendments are issued under sections 21 and 35A of the Banking Regulation Act, 1949. * **Disclosure Requirements:** * A new sub-sub paragraph (ix) is inserted under sub-paragraph 10(5) on 'Exposures' in Chapter-III ('Disclosure in Financial Statements – Notes to Accounts'). * Details of exposures to related parties, as defined in the "Reserve Bank of India (Local Area Banks – Credit Risk Management) Directions, 2025," must be disclosed. * **Table for Disclosures (Amount in ₹ crore):** * **A. Loans to Related Parties** * Aggregate value of loans sanctioned to related parties during the year. * Aggregate value of outstanding loans to related parties as on 31st March. * Aggregate value of outstanding loans to related parties as a proportion of total credit exposure as on 31st March. * Aggregate value of outstanding loans to related parties categorized as: * Special Mention Accounts as on 31st March * Non-Performing Assets as on 31st March * Amount of provisions held in respect of loans to related parties as on 31st March. * **B. Contracts and Arrangements involving Related Parties** * Aggregate value of contracts and arrangements awarded to related parties during the year. * Aggregate value of outstanding contracts and arrangements involving related parties as on 31st March. * **Effective Date:** * The amendments are effective from April 1, 2026. * Banks have the option to implement the amendments in entirety from an earlier date. **Impact Analysis** **Stakeholder:** Local Area Banks (LABs) **Impact** LABs must now comply with the new disclosure requirements regarding exposures to related parties in their financial statements. **Action Required** LABs need to prepare to collect and report the data required in the new disclosure table and incorporate the new reporting format into their financial statements by the effective date (April 1, 2026) or earlier, if they choose.

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