RBI's New Financial Reporting Rules for Payments Banks
Current · Source: Reserve Bank of India · RBI/DOR/2025-26/216 · issued 28 Nov 2025 · ~2 min read
Quick answerRBI issued Directions on financial statement presentation and disclosures for Payments Banks, effective immediately from the date of issuance (November 28, 2025). Banks must follow prescribed balance sheet and P&L formats, comply with Accounting Standards, and meet enhanced disclosure requirements. This replaces older guidelines.
The rule, in the simplest words
Payments Banks must use the new balance sheet and profit & loss formats set by RBI (Directions 2025) and follow the Third Schedule of the Banking Regulation Act.
They must follow Accounting Standards from the Companies (Accounting Standards) Rules 2021 and RBI guidelines when preparing financial statements.
New disclosure rules require detailed notes for items like fraud provisions, unreconciled balances, deferred tax liabilities, and inter‑branch/Nostro account adjustments.
Banks must show net balances of inter‑office adjustments and interest on deposits as liabilities, and separate provisions for standard assets under the heading ‘Others (including provisions)’.
If any item under ‘Others (including provisions)’ is more than 1% of total assets, it must be disclosed in the notes to accounts.
How it plays out — a real example
Riya, a payments‑bank officer in Jaipur, uses the new RBI template to record a 2% provision for fraud. She places it under ‘Others (including provisions)’ on the balance sheet and writes a note because it exceeds 1% of the bank’s total assets, ensuring the bank follows the new disclosure rules.
What changed
RBI issued the Reserve Bank of India (Payments Banks – Financial Statements: Presentation and Disclosures) Directions, 2025, effective immediately from November 28, 2025. These Directions prescribe the format for balance sheet and profit and loss account as per the Third Schedule of the Banking Regulation Act, 1949, and include detailed instructions for compilation, disclosure requirements, and guidance on accounting standards. They also cover consolidated financial statements, inter-branch account provisioning, Nostro reconciliation, reserve fund transfers, fraud provisioning, unreconciled balances, deferred tax liability on special reserves, and window dressing.
What it means for you
Payments Banks must now strictly adhere to the new standardized formats and disclosure norms for their financial statements, ensuring greater transparency and comparability. The Directions mandate compliance with Accounting Standards notified under the Companies (Accounting Standards) Rules, 2021, subject to RBI guidelines, which may require changes in internal reporting systems. Banks need to review and update their financial reporting processes to align with these requirements, including specific provisions for fraud, unreconciled balances, and deferred tax liabilities.
What you must do
Update financial statement templates to match the formats in Annex I of the Directions.
Ensure compliance with all Accounting Standards as per Companies (Accounting Standards) Rules, 2021, and RBI guidelines.
Review and implement new disclosure requirements in Notes to Accounts as per Chapter III.
Adjust provisioning and reconciliation processes for inter-branch accounts, Nostro accounts, fraud, and unreconciled balances as per Chapter V.
Train finance and compliance teams on the updated Directions and repeal of previous versions.
Who it affects
Payments Banks, Finance and accounting departments of Payments Banks, Compliance teams of Payments Banks, Auditors of Payments Banks
❓ Common questions
When do these Directions take effect?
The Directions came into force with immediate effect from November 28, 2025.
Do these Directions replace any previous guidelines?
Yes, Chapter VI provides for repeal and saving of previous versions, meaning earlier directions on this subject are superseded.
Are these Directions applicable to all Payments Banks?
Yes, the Directions are applicable to all Payments Banks as defined in the document.
📜 Read the original circular — full text as issued by RBI
Includes net provision for income tax, other taxes like interest tax (less advance payment, tax deducted at source, etc.), deferred tax (if after netting as per AS 22 is a liability), floating provisions, and contingency funds which are not disclosed as reserves, but are actually in the nature of reserves, other liabilities which are not disclosed under any of the major heads such as unclaimed dividend, provisions and funds kept for specific purposes, unexpired discount, outstanding charges like rent, conveyance, etc. Aggregate Net Credit in the Clearing Differences transferred to a separate Blocked Account shall be shown here. Outstanding credit entries in nostro accounts transferred to Blocked Account shall also be shown here.
Notes:
1. For arriving at the net balance of inter-office adjustments all connected inter-office accounts shall be aggregated and the net balance only will be shown, representing mostly items in transit and unadjusted items.
2. The interest accruing on all deposits, whether the payment is due or not, shall be treated as a liability.
3. It is proposed to show only deposits under the head ‘deposits’ and hence all surplus provisions for contingency funds, etc., which are not netted off against the relative assets, shall be brought under the head ‘Others (including provisions)’.
4. Provisions towards Standard Assets shall not be netted from gross advances and shown separately as ‘Provisions against Standard Assets’ under ‘Others’ in Schedule 5 of the Balance Sheet.
5. Where any item under the ‘Others (including provisions)’ exceeds one per cent of the total assets, particulars of all such items shall be disclosed in the notes to accounts.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/DOR/2025-26/216 · issued 28 Nov 2025. The plain-English explanation above is BankPulse’s own independent summary.
Adjust provisioning and reconciliation processes for inter-branch accounts, Nostro accounts, fraud, and unreconciled balances as per Chapter V.
📜 Compliance
Update financial statement templates to match the formats in Annex I of the Directions.
Ensure compliance with all Accounting Standards as per Companies (Accounting Standards) Rules, 2021, and RBI guidelines.
Review and implement new disclosure requirements in Notes to Accounts as per Chapter III.
Train finance and compliance teams on the updated Directions and repeal of previous versions.
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 (Payments Banks, Finance and accounting departments of Payments Banks, Compliance teams of Payments Banks, Auditors of Payments Banks), your first concrete step on “RBI's New Financial Reporting Rules for Payments Banks” is: “Update financial statement templates to match the formats in Annex I of the Directions.” (RBI issued this 28 Nov 2025).
Circular: RBI/DOR/2025-26/216 -- RBI's New Financial Reporting Rules for Payments Banks
Issued: 28 Nov 2025
Action required: Update financial statement templates to match the formats in Annex I of the Directions.
Action required: Ensure compliance with all Accounting Standards as per Companies (Accounting Standards) Rules, 2021, and RBI guidelines.
Action required: Review and implement new disclosure requirements in Notes to Accounts as per Chapter III.
Action required: Adjust provisioning and reconciliation processes for inter-branch accounts, Nostro accounts, fraud, and unreconciled balances as per Chapter V.
Action required: Train finance and compliance teams on the updated Directions and repeal of previous versions.
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=13092&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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