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Informist, Friday, Feb. 13, 2026

--RBI issues amendment norms for rural co-operative banks income recognition 

--RBI: Rural co-operative banks income recognition amendment effective Fri 

MUMBAI – The Reserve Bank of India Friday amended its directions on income recognition, asset classification and provisioning of rural co-operative banks, effective immediately. Under the amended norms, rural co-operative banks can recognise income, including interest, fees, commissions, or other income, on an accrual basis in respect of credit facilities classified as 'standard', without the requirement to make any matching provision, the RBI said.

A standard asset is one that does not disclose any problems and does not carry more than the normal risk associated with the business. "With a view to ensuring uniformity in the recognition of overdue income (interest, fee, commission or other income) in standard advances by rural cooperative banks as well as to harmonise the same in line with other regulated entities, it has been decided that in case of standard advances, banks shall recognise income on accrual basis without the requirement of making any matching provision," it said.

However, for rural co-operative banks' credit facilities which are not classified as 'standard', including those guaranteed by the government, income will be recognised on the actual receipt basis, that is, cash basis, the RBI said. Moreover, in case any credit facility of the bank, including bills purchased and discounted, as well as those guaranteed by the government, turns into a non-performing asset, the entire interest, fees, commissions and other income accrued and credited to the income account in the past periods, should be reversed if the same is not realised, it said. End

Reported by Pratiksha

Edited by Saji George Titus

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