RBI tightens income recognition norms on banks' acquired assets

The read

RBI shut a loophole. Under the amended directions, any accrued but unrealised interest on extinguished exposure tied to acquired non-financial assets can no longer be booked as income before cash arrives; banks must reverse such income already recognised by September 30, 2027. Income from SNFA may only be recognised as non-interest income upon realisation. The move forces a conservative stance, cleaning up earnings quality and aligning profit with cash flows. The verdict: a prudent tightening.