RBI sets prudential norms for repossessed immovable assets, capping disposal at seven years

On 16 July 2026, the Reserve Bank of India (RBI) issued amendment Directions inserting prudential norms for Specified Non-financial Assets (SNFAs) — immovable assets acquired in satisfaction of claims — across all regulated lender classes: SNFAs must be valued at the lower of net book value or distress sale value by at least two independent external valuers, disposed within a maximum of seven years, kept out of NPA and stressed-exposure aggregates, and never sold back to the borrower or related parties; effective 1 October 2026.

The norms carve repossessed immovable assets out of the stressed-asset framework and into a distinct prudential regime. SNFAs must be removed from Gross NPA, Net NPA, stressed-exposure aggregates and Provisioning Coverage Ratio and recorded under a non-banking-assets accounting head, changing balance-sheet treatment. Disposal is capped at seven years and sale back to the borrower or its related parties is barred, tightening recovery and asset-management timelines. Valuation requires at least two independent external valuers, with the asset carried at the lower of net book value or distress sale value both at acquisition and at each reporting date. The regime applies uniformly to commercial banks, small finance banks, NBFCs, AIFIs, urban and rural co-operative banks, RRBs and local area banks.