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Informist, Friday, Feb. 13, 2026

--RBI issues amendement norms for NBFCs' income recognition, provisioning 

--RBI: NBFCs income recognition, provisioning amendement norms effective Fri 

MUMBAI – The Reserve Bank of India Friday issued amendement directions for non-banking financial companies' income recognition, asset classification and provisioning, effective immediately. Under the amended norms, non-banking financial companies can consider default loss guarantee arrangement for determining provisions under the expected credit loss framework across all stages. 

This will be subject to the requirements as laid down under Indian Accounting Standards, which mandates the default loss guarantee arrangement to be integral to the contractual terms of the loan and the default loss guarantee not being recognised separately. Further, a non-banking financial companies is required to recompute their expected credit loss provisioning needs across stages, after duly adjusting for the reduced default loss guarantee cover as upon every event of invocation of default loss gurantee, the cover reduces to the extent of invocation, the central bank said. 

In June 2023, default loss guarantee arrangements were permitted in the limited case of digital lending. Subsequently, the same was also permitted for co-lending arrangements in August 2025. End

Reported by Pratiksha

Edited by Akul Nishant Akhoury

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