RBI Update - Reserve Bank of India (Non-Fund Based Credit Facilities) Directions, 2025. Applicable - Commercial Banks (including Regional Rural Banks and Local Area Banks); Primary (Urban) Co-operative Banks (UCBs)/ State Co-operative Banks (StCBs)/ Central Co-operative Banks (CCBs); All India Financial Institutions (AIFIs); Non-Banking Financial Companies (NBFCs) including Housing Finance Companies (HFCs)

Please find the following update under RBI The Reserve Bank of India (Non-Fund Based Credit Facilities) Directions, 2025 aim to harmonize and consolidate the regulatory framework governing non-fund based (NFB) facilities like guarantees, letters of credit, and co-acceptances across all regulated entities (REs). These Directions provide a comprehensive structure for issuance, monitoring, and risk management of NFB exposures, while enhancing transparency, credit discipline, and operational resilience. They also introduce enabling provisions for infrastructure financing through mechanisms like Partial Credit Enhancement (PCE), strengthen prudential norms, and emphasize digital integration for guarantees. These Directions shall be effective from April 1, 2026, with earlier adoption permitted as per the internal policy of the RE.

Link - View Circular