Reserve Bank of India (Small Finance Banks - Financial Statements: Presentation and Disclosures) Directions, 2025 (Updated as on July 01, 2026)
UR
- Applies toSmall finance banks
- StatusIn force
- ImportanceMUST READ
- IssuedNov 28, 2025
- Last amendedJul 30, 2026 · 4 incorporated
- Length70 points in 5 sections · 6 min read
The four dates on this rule
- PublishedNov 28, 2025The day RBI put this document out.
- Starts to applyNot statedNot stated separately in this document. Read the rule itself before you assume a start date.
- Time to get readyNot statedCannot be worked out until the day it starts to apply is known.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
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Numbers to remember
| ninety days | Liquidity cover data is a plain average of daily figures over ninety days. RBI Para 10(2) |
| one month | Banks must send consolidated financial statements to RBI within one month of publishing annual accounts. RBI Para 16(9) |
| five years | Credit entries unreconciled for more than five years move to a Blocked Account. RBI Para 18(1) |
| two years | Banks must fully provide for unreconciled Nostro debit entries older than two years. RBI Para 19(5) |
| 25 percent | Banks must move at least 25 percent of net profit to the Statutory Reserve. RBI Para 20(1) |
What it says
Chapter I. Preliminary
1. Accounts rules for SFBs
This paper sets how small finance banks must show their accounts.
2. Start date
These Directions came into effect on the day RBI issued them.
3. Who is covered
These Directions apply to every small finance bank.
Chapter II. Balance sheet and profit and loss account
Must know
1. Capital reserves are not free
A capital reserve cannot hold any sum free to be paid out as profit.
2. Twenty per cent means influence
Holding a fifth or more of the votes is taken to mean significant influence.
Do it
3. Compile as instructed
The balance sheet and profit account must be drawn up as told here.
4. Follow the accounting standards
The set accounting rules must be followed, subject to what RBI says.
5. Explain the year's changes
Any change in capital in the year must be explained in the notes.
6. Statutory reserves shown apart
Reserves made under the Banking Regulation Act must be shown on their own.
7. Lien deposits in a footnote
The sum of deposits under lien must be shown in a note to the schedule.
8. Secured borrowings shown apart
Borrowings against security must be shown on their own.
9. Other banking business
Extra segments inside other banking business must be reported where they meet the test.
10. Name the related party
The name and nature of a related party tie must be shown, even with no dealings.
Background
11. Calls in arrears deducted
Calls in arrears come off called-up capital, and forfeited shares are added back.
12. Combine where sensible
Items that can go together are shown under one head.
13. Revaluation is a capital reserve
A gain on revaluing an asset is treated as a capital reserve.
14. Share premium stands alone
Premium on shares issued is shown on its own.
15. Provisions are not reserves
A sum kept for wear and tear, or for a known due, is not a reserve.
16. Loss shown as a deduction
Where there is a loss, the sum is shown as a deduction.
17. Accrued interest sits elsewhere
Interest earned but not yet due on deposits is shown under other dues.
18. Matured deposits are demand
A term deposit that has matured is treated as a demand deposit.
19. Scheme deposits classed by demand
A deposit under a special scheme is a term deposit unless it is payable on demand.
20. Refinance is a borrowing
Refinance from RBI or other bodies is shown under borrowings.
21. Advances shown gross
Advances are shown at the gross sum on the asset side.
22. Net the inter-office accounts
Only the net of inter-office accounts, at home and abroad, is shown.
23. Interest accrued is a liability
Interest earned on any deposit is a due, whether or not it is payable yet.
24. Standard asset provisions apart
Sums kept for standard assets are shown on their own, not cut from gross advances.
25. Rate on the day
Applying the rate of the day is hard for items not booked in rupees.
26. Format is only a guide
The format given is an example and does not cover everything.
27. Secrecy comes first
Where telling would break a duty of secrecy set by law, the disclosure is not made.
28. Customer secrecy is a duty
The common law duty to keep customer details secret excuses such disclosure.
29. Influence, not control
Significant influence is a share in policy decisions, not control over them.
30. Below twenty, no influence
Holding less than a fifth of the votes is taken to mean no significant influence.
31. A big holder does not
Another investor holding most of the shares does not by itself rule out influence.
32. Intangible asset rule
This standard covers intangible assets not dealt with by another standard.
33. Intangibles block a dividend
A lender holding intangible assets needs Central Government leave to pay a dividend.
34. Sponsored RRBs are associates
A regional rural bank that a lender sponsors is treated as an associate.
35. Impairment is for fixed assets
The wear and tear rule covers fixed assets, not loans or investments.
Chapter III. Disclosure in financial statements – Notes to Accounts
Must know
1. Ninety-day average
Liquidity cover data is a plain average of daily figures over ninety days.
Do it
2. Disclose in notes to accounts
What this chapter names must be shown in the notes to accounts.
3. Show the previous period
Last year's figure must be shown beside every figure for this year.
4. Narrative comparatives too
Last year's words must be given too, where they help make this year clear.
5. Weighted and unweighted
Both the weighted and the plain values of the liquidity parts must be shown.
6. Explain the ratio too
Words must go with the liquidity cover figures to make them clear.
7. Link if not included
If the figures are not in the report, a clear direct link must be given.
8. Four quarters if yearly
A yearly reporter must show the funding ratio for the last four quarters.
9. Keep an archive online
Old forms for earlier periods must be kept on the website.
10. Prescribed format always
Wherever it is shown, it must follow the form set out in this chapter.
11. Explain the funding ratio
Words must go with the stable funding ratio to make it clear.
12. Disclose sales out of HTM
Sales out of held to maturity must be shown in the notes in the set form.
13. Break out a big industry
An industry above a tenth of all industry advances must be shown on its own.
Background
14. These do not replace others
These are added to, and do not take the place of, what other law asks for.
15. Policies as a schedule
The main accounting policies and the notes go in as their own schedules.
16. Haircuts before the value
The weighted value of top quality liquid assets is taken after haircuts.
17. Consolidated and in rupees
The stable funding ratio is worked out for the whole group and shown in rupees.
18. Quarter-end observations
The funding ratio data is shown as figures at each quarter end.
19. Floating provisions may net off
Floating sums not counted in Tier 2 may be cut from gross bad loans.
20. Conversion outside the ceilings
Shares taken on turning debt to equity in a rework fall outside the market limits.
Chapter IV. Consolidated Financial Statements
1. One-month RBI filing
Banks must send consolidated financial statements to RBI within one month of publishing annual accounts.
2. Consolidated statements
Every bank, listed or not, must prepare consolidated financial statements each year.
Chapter V. Other Instructions
Must know
1. Blocked Account credits
Credit entries unreconciled for more than five years move to a Blocked Account.
2. Old Nostro debits
Banks must fully provide for unreconciled Nostro debit entries older than two years.
3. Statutory Reserve transfer
Banks must move at least 25 percent of net profit to the Statutory Reserve.
4. Unclaimed transitory balances
Unclaimed balances in transitory accounts cannot be moved to profit or to reserves.
Do it
5. Late-report penalty
If a bank reports fraud late, it must set aside the full provision at once.
6. Deferred tax rule
Banks must set aside deferred tax on the Special Reserve under the Income Tax Act.
7. True and fair picture
The balance sheet and profit and loss account must show a true and fair picture.
Background
8. Fraud provision spreading
A bank that reports fraud on time can spread the provision over four quarters.
9. Window dressing penalty
RBI treats window dressing and hiding bad loans seriously and can take penal action.
Chapter VI. Repeal and Other Provisions
1. Old cases continue
Penalties and legal cases already started under the old rules still continue.
How this rule has changed
The points above are the rule as it stands today, after every change listed here.
Issued on Nov 28, 2025. This is the date RBI put the rule out.
Changed on Jan 05, 2026.
- New disclosure item. Small finance banks must add a new note on exposures to related parties in the notes to accounts.
- Define related parties. Banks must follow the related party definition from the Small Finance Banks Credit Risk Management Directions, 2025.
- Loans outstanding data. Banks must show total loans outstanding to related parties as on 31st March for both years.
- Share of total credit. Banks must disclose loans outstanding to related parties as a share of total credit exposure on 31st March.
Changed on Mar 16, 2026.
- New disclosure line. Banks must add this payment table for deposit insurance premium in their annual report.
- Statement on premium paid. Banks must state in the annual report that they paid deposit insurance premium on time, where this is true.
- Statement if payment delayed. If the bank missed the due dates, the annual report must also say that payment was not on time.
- Effective date. These changes start from April 1, 2026.
Changed on Mar 30, 2026.
- Add new capital market table. Banks must add the new sub paragraph 10(5)(iia) table for capital market exposure in notes to accounts.
Changed on Jul 30, 2026.
- Old LCR NSFR rows. Banks must stop using paragraphs 10(2)(ii) and 10(2)(iii) for liquidity and funding ratio notes.
- Old pay note removed. Banks must no longer use paragraph 10(13) for staff pay disclosure in these statements.
- Start date. These changes apply for financial statements from April 1, 2027.
The same subject for other kinds of institution
The same subject for other kinds of institution.
RBI financial statement and disclosure rules for all India financial institutions
RBI financial statement and disclosure rules for commercial banks
RBI financial statement and disclosure rules for local area banks
RBI financial statement and disclosure rules for payments banks
RBI financial statement and disclosure rules for regional rural banks
RBI financial statement and disclosure rules for rural co-operative banks
RBI financial statement and disclosure rules for urban co-operative banks
Other RBI rules for small finance banks
RBI compliance officer and compliance function rules for small finance banks 2026
RBI credit bureau reporting rules for small finance banks 2025
RBI credit card and debit card rules for small finance banks 2025
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