**Executive Summary**
The Reserve Bank of India (RBI) has issued Amendment Directions, 2026, concerning credit facilities extended by All India Financial Institutions (AIFIs) to Infrastructure Investment Trusts (InvITs). These directions, effective from July 1, 2026, or earlier if adopted fully by an AIFI, outline new regulations for lending to InvITs registered with SEBI. Comments on the directions are requested.
**Key Points / Main Content**
* **Removal of Existing Paragraphs:** Paragraphs 123 to 126 in 'Chapter VI - Other Instructions on Credit Facilities' of the Directions are to be deleted.
* **New Lending Guidelines for InvITs:**
* AIFIs are permitted to lend to InvITs registered and regulated by SEBI.
* AIFIs must consider the legal provisions concerning InvITs, especially regarding security enforcement, and ensure borrowing is within the trust deed.
* AIFIs must strictly monitor the end-use of funds to prevent financing of unauthorized activities like land acquisition.
* **General Lending Conditions:**
* AIFIs must have a Board-approved policy on lending to InvITs, covering appraisal, sanctioning, underwriting norms (including DSCR), exposure limits, and monitoring mechanisms.
* AIFIs shall only lend to InvITs where none of the underlying SPVs is facing 'financial difficulty' as defined in RBI directions.
* Financing InvITs for equity acquisition is subject to paragraph 114 of the Chapter.
* Lending must be through loans without bullet or ballooning principal repayments.
* AIFIs may lend only to InvITs that are listed, have at least three years of operations with positive net distributable cash flows in the preceding two years, and haven't faced adverse regulatory action in the past three years.
* **Prudential Leverage and Security:**
* AIFIs must assess critical parameters to ensure timely debt servicing by InvITs.
* Overall InvIT borrowing leverage must be within SEBI's prudential ceiling or a lower limit decided by the AIFI's Board.
* Financing to InvITs must be fully secured by a charge on identified assets, either at the InvIT or SPV/holdco level, not both. Existing loans at the SPV/holding company level against the assets shall be fully liquidated. A charge over receivables or an escrow mechanism should be in place.
**Impact Analysis**
**Stakeholder:** All India Financial Institutions (AIFIs)
**Impact:** AIFIs need to revise their lending policies and procedures to comply with the new guidelines for lending to InvITs.
**Action Required:** AIFIs must adopt the amended directions, implement the new lending guidelines, and revise internal policies and procedures accordingly.
**Stakeholder:** Infrastructure Investment Trusts (InvITs)
**Impact:** InvITs are subject to the new borrowing conditions, including those related to registration, financial performance, regulatory history, and end-use of funds.
**Action Required:** InvITs must ensure they meet the eligibility criteria to receive financing from AIFIs and comply with the new restrictions on the use of funds.
Key Entities Referenced
Reserve Bank of India (All India Financial Institutions – Credit Facilities) Directions, 2025: Directions issued by RBI governing credit facilities to All India Financial Institutions (AIFIs)
Reserve Bank of India: The regulator issuing amendment directions concerning credit facilities to All India Financial Institutions
All India Financial Institutions (AIFIs): Entities regulated by these directions, focusing on credit facilities
Infrastructure Investment Trusts (InvITs): Investment vehicles to which AIFIs are permitted to lend under the amended directions
SEBI: The regulator responsible for InvITs
भारतीय �रज़वर् बैंक
RESERVE BANK OF INDIA
RBI/2025-26/<>
DOR.CRE.REC. /07.01.007/2025-26 DD-MM-YYYY
Reserve Bank of India (All India Financial Institutions – Credit Facilities)
Amendment Directions, 2026 – Draft for Comments
Please refer to the Reserve Bank of India (All India Financial Institutions – Credit
Facilities) Directions, 2025 (hereinafter referred to as ‘Directions’).
2. On a review, and in exercise of the powers conferred by Section 45L of the
Reserve Bank of India Act, 1934 and all other provisions / laws enabling the Reserve
Bank of India in this regard, the Reserve Bank of India, being satisfied that it is
necessary and expedient in public interest so to do, hereby, issues the Amendment
Directions hereinafter specified.
3. The Amendment Directions modify the Directions as under:
3(1) In ‘Chapter VI – Other Instructions on Credit Facilities’ of the Directions,
paragraphs 123 to 126 shall be deleted.
3(2) The following paragraphs shall be inserted under the sub-section ‘C.2 Lending
to Infrastructure Investment Trusts (InvITs)’, namely:
“126A. AIFIs shall be permitted to lend to InvITs which are registered with and
regulated by SEBI.
126B. As InvITs are trusts, the AIFI shall be mindful of the legal provisions in
respect of these entities especially those regarding enforcement of security.
Specifically, the AIFI shall establish that the borrowing by the trustee is well
within the powers allowed under the respective trust deed.
126C. An AIFI shall strictly monitor the end use of funds lent to InvITs to
ensure that this route is not being used to finance activities which are notReserve Bank of India (All India Financial Institutions – Credit Facilities) Amendment Directions, 2026
permitted, such as land acquisition, even where such acquisition forms part of
a project.
126D. General Conditions:
(1) An AIFI shall put in place a Board approved policy on lending to
InvITs, which shall, inter alia, cover appraisal mechanism,
sanctioning conditions, underwriting norms, including metrics such
as the debt service coverage ratio (DSCR) and their corresponding
benchmark levels, internal limits for individual exposures as well as
the aggregate portfolio, and monitoring mechanisms, including
stipulation of appropriate covenants.
(2) An AIFI shall lend to only those InvITs where none of the underlying
SPVs is facing ‘financial difficulty’ as defined in the Reserve Bank of
India (All India Financial Institutions – Resolution of Stressed
Assets) Directions, 2025.
(3) Finance to InvITs for acquiring equity of other entities shall be
subject to the relevant conditions given in Paragraph 114 of this
Chapter.
(4) Lending to an InvIT by an AIFI shall only be by way of loans not
involving bullet or ballooning principal repayments.
(5) An AIFI may lend only to an InvIT which satisfies the following
conditions:
a) InvIT is listed;
b) InvIT has completed minimum three years of operations, with
a positive ‘net distributable cash flows’ in the preceding two
financial years.
c) InvIT should not have been subject to any material adverse
regulatory action during the previous three years.
126E. Prudential Ceiling on Leverage:
(1) Without prejudice to generality, an AIFI shall undertake assessment
of all critical parameters including sufficiency of cash flows at InvIT
level to ensure timely debt servicing.Reserve Bank of India (All India Financial Institutions – Credit Facilities) Amendment Directions, 2026
(2) Overall leverage of the borrowing InvIT shall be within the
prudential ceiling prescribed by SEBI, or such lower limit as may be
decided by the AIFI’s Board.
126F. Security Coverage
(1) Finance by an AIFI to InvITs shall be fully secured by way of a
charge on identified assets. The financing against a specified asset
across all banks and AIFIs shall be extended either at the InvIT
level or at the SPV/holdco level, but not at both levels. Where a
facility is extended at the InvIT level against a specified asset, any
existing loan at the SPV or holding company level in respect of such
asset shall be fully liquidated.
(2) The AIFI shall also create a charge over receivables from the
underlying assets and / or establish an escrow mechanism to
prevent diversion of cash flows.”
4. These Directions shall come into force from July 1, 2026, or an earlier date when
adopted by an AIFI in entirety.
(Vaibhav Chaturvedi)
Chief General Manager