Economy · 18 Jul 2026

Specified Non-Financial Assets RBI

With reference to the RBI's newly introduced "Specified Non-Financial Assets" (SNFA) framework, consider the following statements:

  1. SNFAs are counted as part of a bank's gross non-performing assets on its balance sheet.
  2. Banks are barred from reselling an SNFA to the original defaulting borrower or related parties.
  3. The disposal of an SNFA must occur primarily through public auction under SARFAESI Act, 2002 principles, within a maximum holding period of seven years.

Which of the statements given above is/are correct?

A1 and 2 only
B2 and 3 only
C1 and 3 only
D1, 2 and 3

Tests the ability to resist an intuitive but incorrect inference (that seized assets must count as NPAs) against the RBI's actual, deliberately separate balance-sheet treatment of the new asset category.

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This question is based on: The RBI Just Shut the Door Defaulting Promoters Used to Walk Back Through
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About this question

Why in news

The RBI's Third Amendment Directions, 2026 created the Specified Non-Financial Assets category to prevent defaulting promoters from buying back their seized properties at a discount, mirroring the logic of Section 29A of the Insolvency and Bankruptcy Code.

Why for UPSC

This tests whether a candidate can resist the intuitive but incorrect assumption that a bank-seized asset must be an NPA, instead recognising the RBI's deliberate design choice to keep SNFAs off standard stressed-asset reporting - a genuine analytical distinction UPSC rewards.

Prelims summary

SNFAs are a distinct RBI asset category, excluded from gross/net NPA classification, banned from resale to original defaulters and must be disposed of via public auction under SARFAESI principles within seven years.

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