**Executive Summary**
This document outlines amendment directions issued by the Reserve Bank of India (RBI) concerning financial statements for Rural Co-operative Banks. The amendments modify disclosure requirements related to exposures to related parties. The directions are effective from April 1, 2026, although banks may choose to implement them earlier.
**Key Points / Main Content**
* **Amendment to Disclosure Requirements:**
* A new sub-paragraph (viii) is added to Chapter-III “Disclosure in Financial Statements – Notes to Accounts” under sub-paragraph 10(5) on Exposures.
* This new sub-paragraph mandates the disclosure of details of exposures to related parties, as defined in the RBI (Rural Co-operative Banks – Credit Risk Management) Directions, 2025.
* **Required Disclosures:**
* 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 and Non-Performing Assets as on 31st March.
* Amount of provisions held in respect of loans to related parties as on 31st March.
* 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 come into force from April 1, 2026.
* Banks have the option to implement the amendments entirely from an earlier date.
**Impact Analysis**
**Stakeholder:** Rural Co-operative Banks
* **Impact:** Rural Co-operative Banks must modify their financial statement disclosures to comply with the new requirements regarding related party exposures.
* **Action Required:** Banks must update their reporting processes and systems to capture and disclose the required information in the prescribed format. The new regulations come into force from April 1, 2026, but Banks may decide to implement the amendments in their entirety from an earlier date.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for issuing this circular.
Banking Regulation Act, 1949: The act granting powers to the Reserve Bank of India.
Reserve Bank of India (Rural Co-operative Banks – Financial Statements: Presentation and Disclosures) Directions, 2025: The original Directions that this amendment modifies.
Reserve Bank of India (Rural Co-operative Banks – Credit Risk Management) – Amendment Directions, 2026: Directions that triggered a review, leading to the issuance of this circular
Reserve Bank of India (Rural Co-operative Banks – Financial Statements: Presentation and Disclosures) – Amendment Directions, 2026: The amendment directions issued by RBI, clarifying disclosure norms for Rural Co-operative Banks regarding financial statements, specifically exposures to related parties.
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
RBI/2025-26/186
DOR.CRE.REC.387/21-04-018/2025-26 January 05, 2026
Reserve Bank of India (Rural Co-operative Banks – Financial
Statements: Presentation and Disclosures) – Amendment Directions,
2026
Please refer to Reserve Bank of India (Rural Co-operative Banks – Financial
Statements: Presentation and Disclosures) Directions, 2025 (hereinafter referred to as
‘the Directions’).
2. On a review, consequent to the issuance of the Reserve Bank of India (Rural Co-
operative Banks – Credit Risk Management) – Amendment Directions, 2026, and in
exercise of the powers conferred by the sections 35A read with Section 56 of the
Banking Regulation Act, 1949 and all other provisions / laws enabling the Reserve
Bank of India (hereinafter called the Reserve Bank) in this regard, the Reserve Bank
being satisfied that it is necessary and expedient in the public interest so to do, hereby
issues the Amendment Directions hereinafter specified.
3. The Amendment Directions modifies the Directions as under:
(1) In Chapter-III ‘Disclosure in Financial Statements – Notes to Accounts’, a new sub-
sub paragraph (viii) shall be inserted under sub-paragraph 10(5) on Exposures, as
given below:
10(5)(viii) Exposures to Related Parties
Details of exposures to related parties as defined in Reserve Bank of India
(Rural Co-operative Banks – Credit Risk Management) Directions, 2025 shall
be disclosed as per the following table:
(Amount in ₹ crore)
Sl Particulars Previous Current
No.
Year Year
A. Loans to Related PartiesReserve Bank of India (Rural Co-operative Banks – Financial Statements: Presentation and Disclosures) – Amendment Directions, 2026
1 Aggregate value of loans sanctioned to related
parties during the year
2 Aggregate value of outstanding loans to related
parties as on 31st March
3 Aggregate value of outstanding loans to related
parties as a proportion of total credit exposure as
on 31st March
4 Aggregate value of outstanding loans to related
parties which are categorized as:
(i) Special Mention Accounts as on 31st March
(ii) Non-Performing Assets as on 31st March
5 Amount of provisions held in respect of loans to
related parties as on 31st March
B. Contracts and Arrangements involving Related Parties
6 Aggregate value of contracts and arrangements
awarded to related parties during the year
7 Aggregate value of outstanding contracts and
arrangements involving related parties as on 31st
March
4. The above amendments shall come into force from April 1, 2026. Banks may
however decide to implement the amendments in entirety from an earlier date.
Vaibhav Chaturvedi
(Chief General Manager)
2