The Reserve Bank of India has introduced new prudential norms that will bar lenders from selling acquired stressed assets back to defaulting borrowers or related parties. The rules apply to banks, small finance banks, and non-banking financial companies from October 2026.
The norms cover specified non-financial assets obtained during stressed loan resolutions. Lenders must create board-approved policies for acquiring and disposing of these assets.
The assets must appear separately on balance sheets rather than as non-performing assets. This change aims to strengthen transparency in asset handling.
The regulations take effect in October 2026 and apply across covered institutions.