**Executive Summary**
This document outlines the Reserve Bank of India's (RBI) proposed amendment directions for Non-Banking Financial Companies (NBFCs) concerning risk weights for infrastructure exposures. It modifies the Master Direction Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023 and introduces criteria for classifying "high-quality infrastructure projects." The amendment directions will come into force from April 1, 2026, or from an earlier date when adopted by a NBFC in entirety.
**Key Points / Main Content**
* **Definition of High-Quality Infrastructure Projects**
* Infrastructure projects are classified as "high-quality" if they meet all of the following criteria:
* Completed at least one year of satisfactory operations post-commercial operation.
* Exposure is classified as ‘standard’ in the lender's books.
* Revenue depends on one main counterparty: a Central Government or a Public Sector Entity, with contractual provisions for certain payments.
* Contractual provisions provide a high degree of protection for creditors (e.g., escrow of cash flows).
* Obligor has sufficient financial arrangements for working capital and other funding needs.
* Obligor is restricted from acting against creditors’ interests.
* **Amendment to Prudential Regulations (Chapter IX, Section III)**
* Weighted risk assets for on-balance sheet items are modified as follows:
* All assets covering PPP and post-commercial operations date (COD) infrastructure projects in existence over a year of commercial operation: 50%
* Loans to 'High-quality infrastructure projects' (as defined):
* Obligor repaid at least 10% of sanctioned amount: 50%
* Obligor repaid at least 5% but less than 10% of sanctioned amount: 75%
* If projects initially qualifying as "high-quality" fail to meet the conditions later, they are subject to other prescribed risk weights.
* **Effective Date**
* The Amendment Directions will come into force from April 1, 2026, or from an earlier date when adopted by a NBFC in entirety.
**Impact Analysis**
**Stakeholder: Non-Banking Financial Companies (NBFCs)**
* **Impact:** Need to assess their infrastructure project portfolios against the new "high-quality" criteria to determine applicable risk weights.
* **Action Required:** Update internal processes and risk management frameworks to incorporate the revised definitions and risk weight guidelines. Adopt the amendment directions in entirety.
**Stakeholder: Infrastructure Project Lenders**
* **Impact:** The risk weights for certain loans will change if infrastructure projects are deemed "high-quality." This could impact capital adequacy ratios and lending decisions.
* **Action Required:** Understand the revised definition of high-quality infrastructure projects and assess its impact on their lending portfolio.
**Stakeholder: Infrastructure Project Obligors/Borrowers**
* **Impact:** Projects that are classified as “high-quality” will benefit from lower risk weights.
* **Action Required:** Understand the criteria to achieve “high-quality” classification and work to meet these conditions where possible.
Key Entities Referenced
Reserve Bank of India: The issuing authority of the directions and central bank of India.
Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023: The Master Direction being amended by these directions.
Reserve Bank of India Act, 1934: The Act conferring powers on the Reserve Bank of India.
Non-Banking Financial Company: The type of financial institution to which these regulations apply.
भारतीय �रज़वर् बैंक
_________________________ RESERVE BANK OF INDIA ______________________
www.rbi.org.in
RBI/2025-26/..
DOR.CRE.REC…./03.10.001/2025-26 DD-MM-YY
Reserve Bank of India (Non-Banking Financial Company – Scale Based
Regulation) Amendment Directions, 2025 - Draft for Comments
The Reserve Bank had issued Master Direction – Reserve Bank of India (Non-
Banking Financial Company – Scale Based Regulation) Directions, 2023 (hereinafter
referred to as Master Direction). Based on a review, it is proposed to amend certain
provisions relating to the applicable risk weights for infrastructure exposures of
NBFCs.
2. Accordingly, in exercise of the powers conferred by Chapter IIIB of the Reserve
Bank of India Act, 1934 and all other laws enabling the Reserve Bank in this regard,
the Reserve Bank being satisfied that it is necessary and expedient in the public
interest to do so, hereby issues the Amendment Directions hereinafter specified.
3. These Amendment Directions modify the Master Direction as under:
(i) In Chapter II – ‘Definitions’, a sub-subparagraph 5.1.14 (A) shall be inserted
after sub-paragraph 5.1.14 as given below:
“5.1.14 (A) Infrastructure projects that meet all the following criteria shall be
classified as high-quality infrastructure projects:
a) The infrastructure project has completed at least one year of satisfactory
operations post achievement of the date of completion of commercial
operations.
b) The exposure is classified as ‘standard’ in the books of the lender.
c) The obligor's revenue depends on one main counterparty, which shall be
a Central Government or a Public Sector Entity, and the contractual
िविनयमन िवभाग, केंद्रीय कायार्लय, केंद्रीय कायार्लय भवन, 12वी/ं 13वी ंमंिज़ल, शहीद भगत िसंह मागर्, फोटर्, मुंबई - 400001
टेलीफोन/ Tel No: 22661602, 22601000 फै�/ Fax No: 022-2270 5691
Department of Regulation, Central Office, Central Office Building, 12th/ 13th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai – 400001
�हदं ी आसान ह,� इसका �योग बड़ाइएprovisions provide for certainty regarding payments from the counterparty,
for eg. availability-based revenues or take-or-pay provisions.
d) The contractual provisions provide for a high degree of protection for
creditors, such as escrow of cash flows; legal first claim of the lender over
all movable and immovable assets; and protection of interest of the
creditors in case of early termination.
e) The obligor 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.
f) The obligor is restricted from acting to the detriment of the creditors, eg.
being restricted from issuing additional debt against the cashflows and
assets of the project without consent of the existing creditors.
(ii) In Chapter IX – Prudential Regulations under Section III, Sr. no. 2 (e) of the
Table under paragraph 84 shall stand modified as under:
Sr. Weighted risk assets - On-balance Sheet items Percentage
No. Weight
(e) All assets covering PPP and post commercial operations 50
date (COD) infrastructure projects in existence over a
year of commercial operation
(e) (i) Loans to ‘High-quality infrastructure projects’ as defined in 50
sub-subparagraph 5.1.14 (A) and where the obligor has
repaid at least 10 percent of the sanctioned amount
(e) (ii) Loans to ‘High-quality infrastructure projects’ as defined in 75
sub-subparagraph 5.1.14 (A) and where the obligor has
repaid at least 5 percent but less than 10 percent of the
sanctioned amount
Note: In the event the projects that qualify as High-quality
infrastructure projects subsequently fail to meet these
conditions, they shall be subject to risk weights prescribed
under Sr. no.3(e) or (g), as applicable, of this table.
4. The Amendment Directions shall come into force from April 1, 2026, or from an
earlier date when adopted by a NBFC in entirety.
(Vaibhav Chaturvedi)
Chief General Manager