What changed
The amendment revises the definition of ‘Revenue Reserve’ in Schedule 2(IV), clarifying that it excludes depreciation, renewals and provisions for known liabilities. It also replaces paragraph 10(3)(vi) with a new heading ‘Movement of provisions for non‑performing investments (NPIs)’ and supplies a detailed table format with Current Year and Previous Year columns.
What it means for you
Banks need to reclassify reserves in their financial statements per the new definition, ensuring depreciation and liability provisions are not counted as revenue reserves. The new NPI provisions table requires annual reporting of opening balance, provisions made, write‑offs, and closing balance, enhancing transparency on NPI provisioning.
What you must do
- Update the definition of revenue reserve in your financial statements as per the new wording.
- Remove depreciation, renewal, and liability provision amounts from revenue reserve calculations.
- Adopt the new month‑wise NPI provisions table in your disclosures.
- Ensure all banks’ annual reports reflect these changes by the next filing deadline.
- Cross‑check compliance with the amended directions before submission.
Who it affects
Commercial banks
When do the new directions apply?
From the date of issue, i.e., May 18, 2026.
Does the amendment affect capital reserves?
No, capital reserves remain unchanged; only revenue reserves are redefined.
What if a bank has already filed its 2025 returns?
The amendment applies to subsequent filings; earlier returns remain unaffected.