Press Release 2026-2027/208, Dated 05.05.2026
The Reserve Bank of India (RBI) has issued draft guidelines on Prudential Norms for Specified Non-Financial Assets (SNFAs), permitting regulated entities to acquire certain non-financial assets in settlement of stressed exposures.
1. Purpose of the Framework
The draft norms aim to:
- Facilitate recovery of Non-Performing Assets (NPAs)
- Provide a structured mechanism where conventional recovery options are not viable
2. Acquisition of Non-Financial Assets
- Regulated entities may acquire specified non-financial assets, including immovable property
- Such acquisition can be:
-
- In full settlement, or
- Partial settlement of NPAs
3. Treatment of Residual Exposure
Where settlement is partial remaining exposure shall be treated as restructured exposure
4. Timeline for Disposal
- Banks are required to sell properties acquired for NPA recovery
- Within 7 years from acquisition
5. Valuation and Accounting Norms
- SNFAs must be valued at the lower of Net Book Value (NBV) or applicable valuation amount
- Appropriate disclosures must be made in the financial statements
6. Objective of the Draft Guidelines
The framework seeks to:
- Improve recovery flexibility for lenders
- Ensure prudent handling of non-financial assets acquired during recovery
- Maintain transparency and prudential discipline
7. Conclusion
The proposed SNFA framework provides a regulated mechanism for acquisition and management of non-financial assets in NPA settlements, balancing recovery objectives with safeguards relating to valuation, disclosure, and timely disposal.
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