RBI Sixth Amendment Directions 2026: Revised Disclosure Framework for Commercial Banks' Financial Statements

Overview of the Amendment

The Reserve Bank of India has notified the Reserve Bank of India (Commercial Banks – Financial Statements: Presentation and Disclosures) Sixth Amendment Directions, 2026, which came into force with immediate effect from the date of its issuance on May 18, 2026. This amendment follows a regulatory review initiated in the wake of changes introduced through the Reserve Bank of India (Commercial Banks – Classification, Valuation, and Operation of Investment Portfolio) Second Amendment Directions, 2026.

The parent framework being amended is the Reserve Bank of India (Commercial Banks – Financial Statements: Presentation and Disclosures) Directions, 2025, originally issued on November 28, 2025. The Sixth Amendment targets two specific areas — the definitional clarity around revenue reserves and the prescribed disclosure format for non-performing investments (NPIs).

Statutory Basis: Powers Under the Banking Regulation Act, 1949

The RBI has exercised its authority under Section 35A of the Banking Regulation Act, 1949 to issue these directions. The RBI has recorded its satisfaction that the amendments are necessary and expedient in public interest, which is the statutory precondition for invoking such regulatory powers.

Reference Circular: RBI/2026-27/91 | DOR.MRG.REC.No.79/21-04-018/2026-27 | Dated: May 18, 2026

What Has Changed: A Detailed Breakdown

1. Revised Definition of "Revenue and Other Reserves" Under Schedule 2(IV)

The amendment modifies the notes and instructions for compilation appearing in the table under Paragraph 5(1) of the 2025 Directions, specifically those pertaining to "Revenue and Other Reserves" as classified under Schedule 2(IV).

The substituted text now reads as follows:

"The expression 'Revenue Reserve' shall mean any reserve other than Capital Reserve. This item will include all reserves, other than those separately classified. The expression 'reserve' shall not include any amount retained by way of providing for depreciation, renewals, or diminution in value of assets or retained by way of providing for any known liability."

What This Means in Practice

The revised note brings critical definitional precision to the concept of Revenue Reserve in bank financial statements. The following distinctions now stand clearly codified: