The Reserve Bank of India (RBI) on May 05, 2026, issued directions on Prudential Norms on Specified Non-financial Assets (SNFA).
The Reserve Bank of India has issued draft guidelines on the prudential treatment of Specified Non-Financial Assets (SNFAs), which arise when regulated entities (REs) acquire non-financial assets—such as immovable property—during recovery of non-performing loans.
These draft norms clarify that such asset acquisition should occur only in exceptional cases where exposures have turned non-performing and other recovery options are not viable. REs may acquire these assets in full or partial settlement of dues, with any remaining exposure in partial cases being treated as restructured and subject to applicable prudential norms.
The guidelines prescribe that SNFAs must be valued conservatively at the lower of the net book value of the extinguished loan or the asset’s distress sale value, with periodic revaluation on similar principles. To ensure timely resolution, a maximum holding period of seven years has been set, and REs are prohibited from selling such assets back to the borrower or related parties to prevent misuse.
Additionally, REs must disclose the stock of SNFAs in their financial statements, ensuring transparency. Stakeholders and the public have been invited to submit comments on the draft guidelines by May 26, 2026.
[Press Release: 2026-2027/208]
