RBI Draft Norms Require Banks to Sell NPA Assets in 7 Years

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  • Last Updated on 7 May, 2026

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RBI SNFA norms NPA recovery assets

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:
    1. In full settlement, or
    2. 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.

Click Here To Read The Full Press Release

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied