The Reserve Bank of India (RBI) issued Amendment Directions on December 4, 2025, regarding Income Recognition, Asset Classification and Provisioning for Small Finance Banks. These directions, RBI/2025-26/129, DOR.STR.REC.340/21-04-048/2025-26, are consequent to the issuance of Reserve Bank of India (Small Finance Banks – Concentration Risk Management) Amendment Directions, 2025, and modify the existing directions by deleting Paragraph 113 under ‘Chapter IV – Provisioning Norms’. Banks can now reverse released provisions or transfer them to the General Reserve. The amendment comes into effect on January 1, 2026. Vaibhav Chaturvedi, Chief General Manager, is the contact person. Contact information for the Department of Regulation, Central Office includes the Central Office Building, 12th/13th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai - 400001. Telephone numbers are 22661602 and 22601000. The Fax number is 022-2270 5691.
Key Entities Referenced
Reserve Bank of India: India's central bank and the primary regulatory body.
Reserve Bank of India (Small Finance Banks – Income Recognition, Asset Classification and Provisioning) Directions, 2025: A set of guidelines issued by RBI regarding income recognition, asset classification, and provisioning for Small Finance Banks.
Banking Regulation Act, 1949: An act of the Parliament of India to regulate banking companies.
Reserve Bank of India (Small Finance Banks – Concentration Risk Management) Amendment Directions, 2025: Directions by RBI focused on managing concentration risk in Small Finance Banks.
भारतीय �रज़वर् बैंक
_________________________ RESERVE BANK OF INDIA ______________________
www.rbi.org.in
RBI/2025-26/129
DOR.STR.REC.340/21-04-048/2025-26 December 4, 2025
Reserve Bank of India (Small Finance Banks – Income Recognition, Asset
Classification and Provisioning) Amendment Directions, 2025
Please refer to Reserve Bank of India (Small Finance Banks – Income Recognition,
Asset Classification and Provisioning) Directions, 2025 (hereinafter referred to as ‘the
Directions’).
2. On a review, consequent to the issuance of Reserve Bank of India (Small Finance
Banks – Concentration Risk Management) Amendment Directions, 2025, and in
exercise of the powers conferred by the sections 21 and 35A of the Banking Regulation
Act, 1949 and all other laws enabling 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:
Paragraph 113 under ‘Chapter IV – Provisioning Norms’ shall stand deleted.
4. Pursuant to the above, a bank shall be free to reverse the released provisions or
transfer the same to General Reserve.
5. The above amendment shall come into force from January 1, 2026.
(Vaibhav Chaturvedi)
Chief General Manager
िविनयमन िवभाग, केंद्रीय कायार्लय, केंद्रीय कायार्लय भवन, 12वी/ं 13वी ंमंिज़ल, शहीद भगत िसंह मागर्, फोटर्, मुंबई - 400001
टेलीफोन/ Tel No: 22661602, 22601000 फै�/ Fax No: 022-2270 5691
Department of Regulation, Central Office, Central Office Building, 12th/ 13th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai – 400001
�हदं ी आसान ह,� इसका �योग बड़ाइए