RBI Notifies RBI (Non-Banking Financial Companies - Concentration Risk Management) Amendment Directions, 2026

The Reserve Bank of India ("RBI"), through notification dated 01.01.2026 notified the RBI (Non-Banking Financial Companies - Concentration Risk Management) Amendment Directions, 2026 ("CRM Amendment Directions")¹ to amend the RBI (Non-Banking Financial Companies – Concentration Risk Management) Directions, 2025 ("CRM Directions").

RBI by way of the CRM Amendment Directions amended the definition of "infrastructure lending" under the CRM

Directions by way of inserting a proviso in respect of 'high quality infrastructure projects' as summarised below:

• Projects meeting all the specified conditions with respect to 'infrastructure lending' shall be classified as lending to "high-quality infrastructure projects" subject to compliance with the following conditions:
  1. The infrastructure project shall have completed at least one year of operations after achieving the date of commencement of commercial operations, without any breach of material covenants stipulated by the lenders.
  2. The exposure shall be classified as 'standard' in the books of the lender.
  3. The borrower's revenue shall depend on rights granted under a concession or contract by the Central Government, a State Government, a public sector entity, or a statutory or regulatory body, and such concession or contract shall provide protection of these rights for the entire concession or contract period, subject to the borrower fulfilling its contractual obligations.
  4. The concession or contractual provisions shall provide a high degree of protection to the lender, including at a minimum: (i) an escrow or Trust and Retention Account mechanism for ringfencing cash flows; (ii) pari-passu charge in favour of the lender over all movable and immovable assets; and (iii) risk mitigation measures for lenders in case of early termination, including step-in rights and minimum termination payments.
  5. The borrower shall have sufficient internal or external financial arrangements, as assessed by the lender, to meet current and future working capital and other funding requirements of the project.
  6. The borrower shall be restricted from acting to the detriment of the lender, including restrictions on issuance of additional debt or further encumbrance of project cash flows and assets without the consent of existing lenders.

The CRM Amendment Directions shall be applicable from the date the respective Non-Banking Financial Company ("NBFC") decides to implement the RBI (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Amendment Directions, 2026 or from 01.04.2026, whichever is earlier.

Footnote

1 RBI (Non-Banking Financial Companies – Concentration Risk Management) Amendment Directions, 2026.

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