Reserve Bank of India (Non-Banking Financial Companies - Concentration Risk Management) Amendment Directions, 2026

**Executive Summary** This document presents the Reserve Bank of India (Non-Banking Financial Companies - Concentration Risk Management) Amendment Directions, 2026, amending the 2025 Directions. The amendment modifies sub-paragraph 4(4) of the Directions, to clarify requirements for infrastructure lending to be classified as lending to 'high-quality infrastructure projects'. These directions are applicable when the NBFC decides to implement the Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Amendment Directions, 2026 or from April 1, 2026, whichever is earlier. **Key Points / Main Content** * **Amendment to Infrastructure Lending Classification:** * A proviso is added to sub-paragraph 4(4) of the Directions. * Infrastructure lending to projects meeting specific criteria shall be classified as lending to 'high-quality infrastructure projects'. * **Criteria for 'High-Quality Infrastructure Projects':** * The infrastructure project has completed at least one year of operations post achievement of the date of completion of commercial operations, without breach of any material covenants stipulated by the lenders. * The exposure is classified as 'standard' in the books of the lender. * The borrower's revenue depends on rights granted under concession/contract by the Central Government, a State Government, a public sector entity, or a statutory or regulatory body, and the contractual provisions provide for protection of these rights for the entire period of concession/contract as long as the borrower fulfils its obligations under the contract. * The concession/contractual provisions provide a high degree of protection for a lender, including provisions of an escrow/Trust and Retention Account mechanism, pari-passu charge, and mitigation of risk in case of early termination. * The borrower has sufficient internal or external financial arrangements to cover current and future working capital and other funding requirements of the project as per the assessment of the lender. * The borrower is restricted from acting to the detriment of the lender, e.g., being restricted from issuing additional debt against or further encumbering the cashflows and assets of the project without consent of the existing lenders. * **Effective Date:** * The amendment directions shall be applicable when the NBFC decides to implement the Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Amendment Directions, 2026 or from April 1, 2026, whichever is earlier. **Impact Analysis** **Stakeholder:** Non-Banking Financial Companies (NBFCs) * **Impact:** NBFCs need to understand and implement the revised criteria for classifying infrastructure lending. * **Action Required:** NBFCs must evaluate their infrastructure lending portfolio against the new criteria and modify their internal processes for assessing and classifying such projects accordingly. They should also decide when to implement the Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Amendment Directions, 2026. **Stakeholder:** Borrowers/Infrastructure Project Developers * **Impact:** Infrastructure project developers seeking loans from NBFCs may need to ensure their projects meet the 'high-quality infrastructure projects' criteria to benefit from potential preferential lending terms or classification. * **Action Required:** Project developers should review their project structures and contractual arrangements to align with the requirements outlined in the amendment. **Stakeholder:** Reserve Bank of India (RBI) * **Impact:** Implementation and monitoring of the revised directions. * **Action Required:** Oversee NBFCs to ensure compliance with the new amendment and assess the impact on infrastructure lending practices.

Key Entities Referenced