Current · Source: Reserve Bank of India · RBI/2025-26/209 · issued 13 Feb 2026 · ~1 min read
Quick answerRBI has amended the NBFC Credit Facilities Directions to align asset classification and provisioning requirements with the Income Recognition, Asset Classification, and Provisioning Directions, effective immediately.
The rule, in the simplest words
NBFCs must now classify each loan and set aside money for possible losses (provisioning) using the rules from the Income Recognition, Asset Classification and Provisioning Directions, 2025.
This change applies to all Non‑Banking Financial Companies (NBFCs) and replaces the old rule in Para 25(1) of the Credit Facilities Directions.
The new rule takes effect immediately, so banks need to update policies and train staff right away.
NBFCs should review their credit‑facility policies, ensure they follow the new classification and provisioning rules, and keep staff informed.
How it plays out — a real example
A loan officer named Meera at a NBFC in Jaipur checks a customer’s loan. Following the new rule, she classifies the loan as ‘non‑performing’ and sets aside ₹50,000 as a reserve for potential loss, making sure the company stays compliant with RBI’s updated guidelines.
What changed
RBI has modified Para 25(1) of the Reserve Bank of India (Non-Banking Financial Companies – Credit Facilities) Directions, 2025, via the Amendment Directions, 2026.
Asset classification of individual loan assets and consequent provisioning requirement will now be in terms of the Reserve Bank of India (Non-Banking Financial Companies – Income Recognition, Asset Classification and Provisioning) Directions, 2025.
The amendment comes into force immediately.
What it means for you
This amendment ensures consistency in asset classification and provisioning requirements for NBFCs by aligning with the IRAC Directions.
What you must do
Review and update NBFC credit facilities policies to align with the amended directions.
Ensure compliance with the new asset classification and provisioning requirements.
Train staff on the updated guidelines and procedures.
Who it affects
Non-Banking Financial Companies (NBFCs)
❓ Common questions
What is the purpose of the amendment?
The amendment aims to align asset classification and provisioning requirements for NBFCs with the Income Recognition, Asset Classification, and Provisioning Directions.
When does the amendment come into force?
The amendment comes into force immediately.
What are the implications of non-compliance?
Non-compliance with the amended directions may lead to regulatory issues and potential risks to the financial system.
📜 Read the original circular — full text as issued by RBI
RBI/2025-26/209
DOR.STR.REC.412/21-07-001/2025-26
February 13, 2026
Reserve Bank of India (Non-Banking Financial Companies – Credit Facilities) Amendment Directions, 2026
Please refer to Reserve Bank of India (Non-Banking Financial Companies – Income Recognition, Asset Classification and Provisioning) Amendment Directions, 2026.
2. Consequential to the aforesaid Amendment Directions, in exercise of the powers conferred by the Chapter III B of the Reserve Bank of India Act, 1934 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 Reserve Bank of India (Non-Banking Financial Companies – Credit Facilities) Directions, 2025 (hereinafter referred to as ‘the Directions’) as under:
Para 25 (1) of the Directions, shall be substituted as below:
25. (1) Asset classification of individual loan assets and consequent provisioning requirement shall be in terms of the Reserve Bank of India (Non-Banking Financial Companies – Income Recognition, Asset Classification and Provisioning) Directions, 2025 .
4. The above amendment shall come into force immediately.
(Vaibhav Chaturvedi)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2025-26/209 · issued 13 Feb 2026. The plain-English explanation above is BankPulse’s own independent summary.
Ensure compliance with the new asset classification and provisioning requirements.
📜 Compliance
Review and update NBFC credit facilities policies to align with the amended directions.
Train staff on the updated guidelines and procedures.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (Non-Banking Financial Companies (NBFCs)), your first concrete step on “RBI Amends NBFC Credit Facilities Directions, 2026” is: “Review and update NBFC credit facilities policies to align with the amended directions.” (RBI issued this 13 Feb 2026).
Action required: Review and update NBFC credit facilities policies to align with the amended directions.
Action required: Ensure compliance with the new asset classification and provisioning requirements.
Action required: Train staff on the updated guidelines and procedures.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13293&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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