**Executive Summary**
This document outlines the Reserve Bank of India's (RBI) Amendment Directions, 2026, modifying the existing Directions of 2025 regarding credit facilities for All India Financial Institutions (AIFIs). The amendment allows AIFIs to lend to Infrastructure Investment Trusts (InvITs) registered and regulated by SEBI, subject to specific conditions. These directions come into force from July 1, 2026, or earlier if adopted in entirety by an AIFI.
**Key Points / Main Content**
* **Lending to InvITs:**
* AIFIs are permitted to lend to InvITs registered with and regulated by SEBI.
* AIFIs must be mindful of legal provisions regarding enforcement of security and ensure the borrowing by the trustee is within the powers allowed under the trust deed.
* AIFIs must strictly monitor the end-use of funds lent to InvITs to prevent financing of activities such as land acquisition.
* **General Conditions:**
* AIFIs must have a Board-approved policy on lending to InvITs, covering appraisal mechanisms, sanctioning conditions, underwriting norms (including DSCR), internal limits, and monitoring mechanisms.
* AIFIs can only lend to InvITs where none of the underlying SPVs face 'financial difficulty' as defined by RBI guidelines.
* Financing to InvITs for acquiring equity of other entities is subject to Paragraph 114 conditions.
* Lending to an InvIT must be through loans not involving bullet or ballooning principal repayments.
* AIFIs can only lend to InvITs which are listed, have a three-year operational history with positive net distributable cash flows in the preceding two financial years, and have not been subject to any material adverse regulatory action in the previous three years.
* **Prudential Ceiling and Security Coverage:**
* AIFIs shall undertake an assessment of all critical parameters including sufficiency of cash flows at InvIT level to ensure timely debt servicing.
* Overall leverage of the borrowing InvIT shall be within the prudential ceiling prescribed by SEBI.
* Financing to InvITs shall be fully secured by a charge on identified assets, extended either at the InvIT level or the SPV/holdco level, but not at both levels.
* AIFIs must create a charge over receivables or establish an escrow mechanism.
* **Implementation:**
* The amendment directions come into force from July 1, 2026, or earlier if adopted in entirety by an AIFI.
**Impact Analysis**
**Stakeholder**: All India Financial Institutions (AIFIs)
* **Impact**: AIFIs are now permitted to lend to InvITs registered with SEBI, expanding their potential lending opportunities while also adhering to specific RBI conditions.
* **Action Required**:
* AIFIs must establish a Board-approved lending policy for InvITs.
* AIFIs must ensure compliance with the specified conditions regarding lending eligibility, leverage, and security coverage.
* AIFIs must adopt the directions in entirety to implement before July 1, 2026.
**Stakeholder**: Infrastructure Investment Trusts (InvITs)
* **Impact**: InvITs that are registered and regulated by SEBI will now have access to funding from AIFIs, potentially increasing capital availability for infrastructure projects.
* **Action Required**: Ensure compliance with the conditions specified by AIFIs.
**Stakeholder**: Reserve Bank of India (RBI)
* **Impact**: Amendment to directions on credit facilities for All India Financial Institutions.
* **Action Required**: Monitor AIFIs compliance with guidelines.
Key Entities Referenced
Reserve Bank of India (All India Financial Institutions – Credit Facilities) Directions, 2025: Original Directions which are being amended by the document
Reserve Bank of India Act, 1934: Act granting powers to the Reserve Bank of India
Reserve Bank of India: The primary regulatory body issuing the Directions
Infrastructure Investment Trusts (InvITs): Entities to which the Directions pertain
Securities and Exchange Board of India (SEBI): Regulator whose guidelines are referenced in the context of InvITs
भारतीय ररज़र्व 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