RBI/2026-27/203
A.P. (DIR Series) Circular No.19

July 17, 2026

To,

All Authorised Dealer Category-I banks

Madam/Sir

Special Rupee Vostro Accounts (SRVAs)

Attention of authorised dealer banks is invited to the following circulars on International Trade Settlement in Indian Rupees (INR): A.P. (DIR Series) Circular No. 10 dated July 11, 2022, Circular No. 08 dated November 17, 2023, Circular No. 11 dated June 11, 2024, A.P. (DIR Series) Circular No. 08 dated August 05, 2025, and A.P. (DIR Series)  Circular No. 14 dated October 03, 2025.

2. On a review, it has been decided to consolidate and rationalise the instructions contained in above referred circulars. Accordingly, this circular is being issued in supersession of the above referred circulars. The changes flowing from the above circulars are indicated in Annex.

3. AD banks in India may open Special Rupee Vostro Accounts (SRVAs) of its branch outside India or a bank resident outside India, in terms of Regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016.

4. The settlement of cross-border trade transactions through SRVA is an additional arrangement for invoicing, payment and settlement of exports and imports in INR. Additionally, all permissible capital and current account transactions under FEMA may be settled through the SRVA. Further, AD banks maintaining SRVA are also permitted to open additional current account for exporter/importer, exclusively for settlement of export/import transactions.

5. SRVA may be funded by way of inward remittances or transfer from other repatriable INR accounts in terms of Foreign Exchange Management (Deposit) Regulations, 2016. The proceeds accrued through permissible current and capital account transactions under FEMA can also be held in the SRVA.

6. Investments in debt instruments out of the balances held in the SRVA shall be governed by the Master Direction - Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025, as amended from time to time.

7. Documentation and reporting of cross-border transactions through SRVA shall be done in terms of the extant guidelines under FEMA 1999, issued from time to time. The details of SRVA held by overseas correspondent banks with AD banks in India may be updated periodically in the ‘SRVA directory’, published by FEDAI.

8. The above instructions shall come into force with immediate effect and AD banks may bring the contents of this Circular to the notice of their constituents and customers concerned.

9. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(N. Senthil Kumar)
Chief General Manager

Annex - List of changes/consolidation undertaken in the present circular dated July 17, 2026

RBI/2026-27/202
DOR.STR.REC.167/21-04-048/2026-27

July 16, 2026

Reserve Bank of India (Local Area Banks – Income Recognition, Asset Classification and Provisioning) Second Amendment Directions, 2026

Please refer to Reserve Bank of India (Local Area Banks – Resolution of Stressed Assets) Second Amendment Directions, 2026 dated July 16, 2026.

2. Consequent to the aforesaid Amendment Directions, 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. These Amendment Directions modify the Directions as under:

(i) The following shall be inserted in Chapter V – Income Recognition:

“E1. Income Recognition in case of acquisition of Specified Non-Financial Assets (SNFA)

119C. Any accrued but unrealised interest and / or charges from the extinguished exposure pertaining to periods prior to acquisition of an SNFA, shall not be recognised as income upon acquisition of the SNFA. Where such income has been recognised in respect of any SNFA outstanding in the books of a bank as on September 30, 2026, it shall be reversed through Profit and Loss account, latest by September 30, 2027, to the extent remaining unrealised as on that date.

119D. Any income received from an SNFA shall be recognised in the income statement as ‘non-interest / other income’, in the financial year in which it is realised. Similarly, any expense incurred towards upkeep of an SNFA shall be accounted for in the income statement in the financial year in which it is incurred.”

4. The above amendment would come into force with effect from October 01, 2026.

(Vaibhav Chaturvedi)
Chief General Manager

RBI/2026-27/201
DOR.STR.REC.166/21-04-048/2026-27

July 16, 2026

Reserve Bank of India (Regional Rural Banks – Income Recognition, Asset Classification and Provisioning) Second Amendment Directions, 2026

Please refer to Reserve Bank of India (Regional Rural Banks – Resolution of Stressed Assets) Second Amendment Directions, 2026 dated July 16, 2026.

2. Consequent to the aforesaid Amendment Directions, in, 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. These Amendment Directions modifies the Directions as under:

(i) The following shall be inserted in Chapter V – Income Recognition:

“B. Income Recognition in case of acquisition of Specified Non-Financial Assets (SNFA)

68C. Any accrued but unrealised interest and / or charges from the extinguished exposure pertaining to periods prior to acquisition of a Specified Non-Financial Asset (SNFA), shall not be recognised as income upon acquisition of the SNFA. Where such income has been recognised in respect of any SNFA outstanding in the books of a bank as on September 30, 2026, it shall be reversed through Profit and Loss account, latest by September 30, 2027, to the extent remaining unrealised as on that date.

68D. Any income received from an SNFA shall be recognised in the income statement as ‘non-interest / other income’, in the financial year in which it is realised. Similarly, any expense incurred towards upkeep of an SNFA shall be accounted for in the income statement in the financial year in which it is incurred.”

4. The above amendment would come into force with effect from October 01, 2026.

(Vaibhav Chaturvedi)
Chief General Manager

RBI/2026-27/200
DOR.STR.REC.165/21-04-048/2026-27

July 16, 2026

Reserve Bank of India (Rural Co-operative Banks – Income Recognition, Asset Classification and Provisioning) Third Amendment Directions, 2026

Please refer to Reserve Bank of India (Rural Co-operative Banks – Resolution of Stressed Assets) Second Amendment Directions, 2026 dated July 16, 2026.

2. Consequent to the aforesaid Amendment Directions, in, in exercise of the powers conferred by the sections 21, 35A and 56 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. These Amendment Directions modifies the Directions as under:

(i) The following shall be inserted in Chapter V – Income Recognition:

“A1. Income Recognition in case of acquisition of Specified Non-Financial Assets (SNFA)

62C. Any accrued but unrealised interest and / or charges from the extinguished exposure pertaining to periods prior to acquisition of an SNFA, shall not be recognised as income upon acquisition of the SNFA. Where such income has been recognised in respect of any SNFA outstanding in the books of a bank as on September 30, 2026, it shall be reversed through Profit and Loss account, latest by September 30, 2027, to the extent remaining unrealised as on that date.

62D. Any income received from an SNFA shall be recognised in the income statement as ‘non-interest / other income’, in the financial year in which it is realised. Similarly, any expense incurred towards upkeep of an SNFA shall be accounted for in the income statement in the financial year in which it is incurred.”

4. The above amendment would come into force with effect from October 01, 2026.

RBI/2026-27/199
DOR.STR.REC.164/21-04-048/2026-27

July 16, 2026

Reserve Bank of India (Urban Cooperative Banks – Income Recognition, Asset Classification and Provisioning) Second Amendment Directions, 2026

Please refer to Reserve Bank of India (Urban Co-operative Banks – Resolution of Stressed Assets) Third Amendment Directions, 2026 dated July 16, 2026.

2. Consequent to the aforesaid Amendment Directions, in exercise of the powers conferred by the sections 20, 21 and 35A read with the section 56 of the Banking Regulation Act, 1949 and all other 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. These Amendment Directions modify the Directions as under:

(i) The following shall be inserted in Chapter V – Income Recognition:

“E1. Income Recognition in case of acquisition of Specified Non-Financial Assets (SNFA)

113C. Any accrued but unrealised interest and / or charges from the extinguished exposure pertaining to periods prior to acquisition of a Specified Non-Financial Asset (SNFA), shall not be recognised as income upon acquisition of the SNFA. Where such income has been recognised in respect of any SNFA outstanding in the books of a bank as on September 30, 2026, it shall be reversed through Profit and Loss account, latest by September 30, 2027, to the extent remaining unrealised as on that date.

113D. Any income received from an SNFA shall be recognised in the income statement as ‘non-interest / other income’, in the financial year in which it is realised. Similarly, any expense incurred towards upkeep of an SNFA shall be accounted for in the income statement in the financial year in which it is incurred.”

4. The above amendment would come into force with effect from October 01, 2026.

(Vaibhav Chaturvedi)
Chief General Manager

RBI/2026-27/198
DOR.STR.REC.163/21-04-048/2026-27

July 16, 2026

Reserve Bank of India (All India Financial Institutions – Income Recognition, Asset Classification and Provisioning) Second Amendment Directions, 2026

Please refer to Reserve Bank of India (All India Financial Institutions – Resolution of Stressed Assets) Second Amendment Directions, 2026 dated July 16, 2026.

2. Consequent to the aforesaid Amendment Directions, in exercise of the powers conferred by the section 45L of the Reserve Bank of India Act, 1934 and all other 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. These Amendment Directions modify the Directions as under:

(i) The following shall be inserted in Chapter V – Income Recognition:

“E1. Income Recognition in case of acquisition of Specified Non-Financial Assets (SNFA)

116C. Any accrued but unrealised interest and / or charges from the extinguished exposure pertaining to periods prior to acquisition of a Specified Non-Financial Asset (SNFA), shall not be recognised as income upon acquisition of the SNFA. Where such income has been recognised in respect of any SNFA outstanding in the books of a AIFI as on September 30, 2026, it shall be reversed through Profit and Loss account, latest by September 30, 2027, to the extent remaining unrealised as on that date.

116D. Any income received from an SNFA shall be recognised in the income statement as ‘non-interest / other income’, in the financial year in which it is realised. Similarly, any expense incurred towards upkeep of an SNFA shall be accounted for in the income statement in the financial year in which it is incurred.”

4. The above amendment would come into force with effect from October 01, 2026.

(Vaibhav Chaturvedi)
Chief General Manager

RBI/2026-27/197
DOR.STR.REC.162/21-04-048/2026-27

July 16, 2026

Reserve Bank of India (Non-Banking Financial Companies Income Recognition, Asset Classification and Provisioning) Third Amendment Directions, 2026

Please refer to Reserve Bank of India (Non-Banking Financial Companies – Resolution of Stressed Assets) Second Amendment Directions, 2026 dated July 16, 2026.

2. Consequent to the aforesaid Amendment Directions, in exercise of the powers conferred by the sections 45JA, 45L and 45M of the Reserve Bank of India Act, 1934; sections 30A and 32 of the National Housing Bank Act, 1987 and section 3 read with section 31A and section 6 of the Factoring Regulation Act, 2011, and all other 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. These Amendment Directions modify the Directions as under:

(i) The following shall be inserted in Chapter II - Prudential Norms applicable to all NBFCs:

“D1. Income Recognition in case of acquisition of Specified Non-Financial Assets (SNFA)

40C. Any accrued but unrealised interest and / or charges from the extinguished exposure pertaining to periods prior to acquisition of an SNFA, shall not be recognised as income upon acquisition of the SNFA. Where such income has been recognised in respect of any SNFA outstanding in the books of a NBFC as on September 30, 2026, it shall be reversed through Profit and Loss account, latest by September 30, 2027, to the extent remaining unrealised as on that date.

40D. Any income received from an SNFA shall be recognised in the income statement as ‘non-interest / other income’, in the financial year in which it is realised. Similarly, any expense incurred towards upkeep of an SNFA shall be accounted for in the income statement in the financial year in which it is incurred.”

4. The above amendment would come into force with effect from October 01, 2026.

(Vaibhav Chaturvedi)
Chief General Manager

RBI/2026-27/196
DOR.STR.REC.161/21-04-048/2026-27

July 16, 2026

Reserve Bank of India (Small Finance Banks – Income Recognition, Asset Classification and Provisioning) Second Amendment Directions, 2026

Please refer to Reserve Bank of India (Small Finance Banks – Resolution of Stressed Assets) Second Amendment Directions, 2026 dated July 16, 2026.

2. Consequent to the aforesaid Amendment Directions, 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. These Amendment Directions modify the Directions as under:

(i) The following shall be inserted in Chapter V – Income Recognition:

“E1. Income Recognition in case of acquisition of Specified Non-Financial Assets (SNFA)

133C. Any accrued but unrealised interest and / or charges from the extinguished exposure pertaining to periods prior to acquisition of a Specified Non-Financial Asset (SNFA), shall not be recognised as income upon acquisition of the SNFA. Where such income has been recognised in respect of any SNFA outstanding in the books of a bank as on September 30, 2026, it shall be reversed through Profit and Loss account, latest by September 30, 2027, to the extent remaining unrealised as on that date.

133D. Any income received from an SNFA shall be recognised in the income statement as ‘non-interest / other income’, in the financial year in which it is realised. Similarly, any expense incurred towards upkeep of an SNFA shall be accounted for in the income statement in the financial year in which it is incurred.”

4. The above amendment would come into force with effect from October 01, 2026.

(Vaibhav Chaturvedi)
Chief General Manager

RBI/2026-27/195
DOR.STR.REC.160/21-04-048/2026-27

July 16, 2026

Reserve Bank of India (Commercial Banks – Income Recognition, Asset Classification and Provisioning) Second Amendment Directions, 2026

Please refer to Reserve Bank of India (Commercial Banks – Resolution of Stressed Assets) Third Amendment Directions, 2026 dated July 16, 2026.

2. Consequent to the aforesaid Amendment Directions, 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. These Amendment Directions modify the Directions as under:

(i) The following shall be inserted in Chapter V – Income Recognition:

“E1. Income Recognition in case of acquisition of Specified Non-Financial Assets (SNFA)

139C. Any accrued but unrealised interest and / or charges from the extinguished exposure pertaining to periods prior to acquisition of an SNFA, shall not be recognised as income upon acquisition of the SNFA. Where such income has been recognised in respect of any SNFA outstanding in the books of a bank as on September 30, 2026, it shall be reversed through Profit and Loss account, latest by September 30, 2027, to the extent remaining unrealised as on that date.

139D. Any income received from an SNFA shall be recognised in the income statement as ‘non-interest / other income’, in the financial year in which it is realised. Similarly, any expense incurred towards upkeep of an SNFA shall be accounted for in the income statement in the financial year in which it is incurred.”.

4. The above amendment would come into force with effect from October 01, 2026.

(Vaibhav Chaturvedi)
Chief General Manager

RBI/2026-27/194
DOR.STR.REC.175/21-04-048/2026-27

July 16, 2026

Reserve Bank of India (Local Area Banks – Resolution of Stressed Assets) Second Amendment Directions, 2026

Please refer to Reserve Bank of India (Local Area Banks – Resolution of Stressed Assets) Directions, 2025 (hereinafter referred to as ‘the Directions’).

2. A bank generally does not transact in immovable assets as part of its core business operations, other than in exceptional cases where it acquires such immovable assets in satisfaction of its claims on the borrower. In order to provide clarity on the prudential treatment of such specified non-financial assets including non-banking assets (NBAs), acquired by a bank through various mechanisms, it has been decided to issue prudential norms applicable in such cases.

3. On examination of the feedback received on the draft Directions issued on May 5, 2026 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 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.

4. These Amendment Directions modify the Directions as under:

i. Paragraph 4 (2B) shall be inserted as below:

(2B) ‘specified non-financial asset’ (SNFA) means an immovable asset acquired by a bank in satisfaction or part satisfaction of its claims on the borrower, including non-banking assets (NBAs) acquired in terms of the relevant provisions of the Banking Regulation Act, 1949.

ii. Paragraph 7B shall be inserted as below:

7B. A bank’s policy shall incorporate suitable clauses for acquisition of an SNFA and disposal thereof. Such provisions shall specify inter-alia the limit on SNFAs as a share of total assets, eligibility criteria, delegation matrix, recovery efforts to be explored before acquisition and maximum period for disposal not exceeding seven years.

iii. A new Chapter V-A as under shall be inserted:

Chapter VA – Prudential Norms on Specified Non-financial Assets

47A. The provisions of this Chapter shall cover all SNFAs including those acquired through bilateral acquisitions or through Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002.

47B. In respect of any SNFA outstanding in the books of a bank as September 30, 2026 (‘Legacy SNFAs’), compliance with these Directions shall be achieved latest by September 30, 2027.

47C. An SNFA shall be deemed to have been acquired only if the title of the asset is transferred in the name of the bank, and the bank is in a clear position to deal with the asset on its own.

47D. SNFA shall be acquired only in cases where a bank’s exposures to a borrower is classified as non-performing.

47E. SNFA may be acquired from the borrower against full or partial extinguishment of the bank’s exposure on a non-recourse basis.

47F. Partial extinguishment of exposure shall be treated as restructuring and the residual exposure to the borrower shall attract the prudential treatment applicable to restructuring as contained in these Directions.

A. Valuation

47G. Upon acquisition, SNFA shall be recorded in the balance sheet at the lower of the net book value (NBV) of the extinguished exposure or the distress sale value of the SNFA arrived by at least two independent external valuers.

47H. In case of partial extinguishment, the NBV of the extinguished exposure shall be calculated on a proportionate basis, i.e., as a proportion of the share of extinguished debt. Illustratively:

47I. At each subsequent reporting date, the SNFA shall be carried on the balance sheet at the revised NBV. The revised NBV of the SNFA shall be the value of extinguished exposure, net of the notional provisions applicable, had the exposure continued on the books of the bank. In case of partial extinguishment, the revised NBV of the SNFA shall be the extinguished fraction of the NBV of the original exposure.

B. Disposal of SNFAs

47J. A bank shall dispose of the SNFA within the maximum period of disposal as envisaged in the bank’s policy, subject to a maximum period of seven years.

47K. A bank shall make all efforts to dispose of the SNFA at the earliest through a public auction. For the purpose of public auction, a bank shall adhere with the principles of auction enshrined in the SARFAESI Act, 2002.

47L. A SNFA shall not be sold back to the borrower or its related parties. Related parties shall have the same meaning as defined in the Insolvency and Bankruptcy Code, 2016. This restriction on sale back to borrower or its related parties shall continue to be adhered to, even in cases where the SNFA has ceased to be an SNFA in terms of paragraph 47M below.

47M. A SNFA put to the bank’s own use shall cease to be classified as an SNFA from the date of being put to use and shall be recorded under the accounting head ‘Fixed assets’ or under any other relevant accounting head.

C. Disclosure Requirements

47N. SNFAs shall not be included in the total stock of residual exposure / Gross NPA / Net NPA / Stressed exposures / Provisioning Coverage Ratio. The same shall be disclosed under the relevant accounting head in the balance sheet of the bank as ‘non-banking assets acquired in satisfaction of claims’.

47O. A bank shall report the details of the SNFAs as per the formats provided in the Annex-2, in CIMS portal.

6. These Directions shall come into force with effect from October 1, 2026.

(Vaibhav Chaturvedi)
Chief General Manager