What changed
RBI introduced the Reserve Bank of India (Small Finance Banks – Financial Statements: Presentation and Disclosures) Directions, 2025, effective immediately from November 28, 2025. These directions consolidate and update requirements for balance sheet formats, profit and loss account compilation, and notes to accounts, replacing previous versions. Key additions include specific guidance on accounting standards, consolidated financial statements, and instructions on items like fraud provisioning and window dressing.
What it means for you
Small Finance Banks must align their financial reporting with the new directions, ensuring strict adherence to the Third Schedule formats and updated accounting standards. This enhances regulatory oversight and comparability across banks, but requires operational adjustments in reporting systems and internal processes. Banks should review and update their financial statement preparation workflows to ensure compliance.
What you must do
- Review the full directions document and map changes to your current financial reporting templates.
- Update internal policies and systems to comply with new disclosure requirements and accounting standard references.
- Train finance and compliance teams on the revised balance sheet and profit and loss account compilation instructions.
- Ensure consolidated financial statements are prepared as per Chapter IV of the directions.
- Monitor for any subsequent RBI clarifications or amendments to these directions.
Who it affects
Small Finance Banks, Finance and accounting departments of SFBs, Compliance teams of SFBs, Auditors of SFBs
When do these directions take effect?
The directions came into force with immediate effect from November 28, 2025, as per the notification.
Do these directions replace older guidelines?
Yes, Chapter VI repeals and saves previous directions on the same subject, so SFBs must follow the 2025 version.
Are these directions applicable to all Small Finance Banks?
Yes, the applicability clause states they apply to all Small Finance Banks, collectively referred to as 'banks'.