--- title: "RBI Draft Amendments: Dematerialisation and Minimum Ticket Size Requirements for Securitisation Notes" date: 2026-08-18 author: "King Stubb & Kasiva" url: https://ksandk.com/newsletter/securitisation-notes-dematerialisation/ --- # RBI Draft Amendments: Dematerialisation and Minimum Ticket Size Requirements for Securitisation Notes Posted On - 18 August, 2026 • By - King Stubb & Kasiva On July 27, 2026, the Reserve Bank of India (“RBI”) issued four draft amendment directions pertaining to Commercial Banks, Small Finance Banks, Non-Banking Financial Companies (“NBFCs”) and All India Financial Institutions (“AIFIs”), proposing changes to the respective **Securitisation Transactions Directions, 2025** governing each category of regulated entity. The proposed amendments seek to improve efficiency, liquidity and transparency in the issuance and subsequent transfer of **Securitisation Notes** (“SNs”). The Directions are presently at the draft stage and open for stakeholder comments until August 27, 2026. If finalised, the proposed amendments are scheduled to come into effect from **October 1, 2026**. ## Understanding Securitisation Securitisation is a process by which a bank, NBFC or financial institution (the “originator”) pools together a set of its loan receivables, such as housing loans, vehicle loans or other retail or corporate credit, and transfers the pool to a Special Purpose Entity (“SPE”) set up specifically for the transaction. The SPE funds the acquisition of the pool through the issuance of debt instruments, referred to as Securitisation Notes (“SNs”), to investors. Investors in SNs are, in effect, acquiring rights to receive payments generated by the underlying pool of loans as the original borrowers repay principal and interest over time. Securitisation enables originators to convert relatively illiquid loan assets into tradable instruments, thereby providing liquidity and potentially creating additional balance-sheet capacity for lending, while giving investors exposure to a pool of credit receivables, subject to the applicable regulatory framework. The draft directions seek to amend the regulations governing the manner in which originators transfer loan pools to SPEs, which in turn fund such acquisitions through the issuance of SNs to investors, as currently provided under the Securitisation Transactions Directions, 2025 applicable to the respective category of regulated entity. ## Mandatory Dematerialisation of Securitisation Notes A key proposal under the draft amendments is that Securitisation Notes must be issued, held and transferred only in **dematerialised form**, thereby eliminating issuance and transfer in physical form. This change is intended to bring greater operational efficiency and transparency to the securitisation market while aligning SNs with the broader trend towards digital holding and transfer of financial instruments. ## Minimum Investment Size of ₹1 Crore The draft amendments also retain the **minimum investment size of ₹1 crore** per investor. Importantly, this requirement applies not only at the time of the original issuance but also to every subsequent transfer of the SN. The RBI has clarified that the ticket size refers to the investment made by a single investor. To operationalise this requirement on an ongoing basis, the agreement between the originator and the SPE must include a clause requiring the SPE to ensure continued compliance with the minimum investment-size requirement throughout the life of the instrument, including at the time of each subsequent transfer. This is particularly relevant for transactions where SNs may subsequently be transferred in the secondary market, as it seeks to prevent transfers resulting in holdings falling below the prescribed threshold. ## Revised Test for a Public Offer The draft directions further seek to align RBI’s definition of an “offer to the public” of Securitisation Notes with the corresponding framework under the Securities and Exchange Board of India (“SEBI”). Under the draft, an offer of SNs would be deemed to have been made to the public where it is made to a number of persons meeting or exceeding the threshold prescribed under Regulation 21 of the SEBI (Issue and Listing of Securitised Debt Instruments and Security Receipts) Regulations, 2008, as amended from time to time. This proposed alignment would link the RBI framework governing public offers of SNs with the threshold prescribed under the applicable SEBI regulations, thereby ensuring greater consistency between the RBI and SEBI regulatory frameworks for securitised debt instruments. ## Key Takeaways for Market Participants The proposed extension of a uniform dematerialisation and minimum investment-size regime across commercial banks, small finance banks, NBFCs and AIFIs reflects RBI’s continuing effort to harmonise the regulatory treatment of similar market instruments, irrespective of the category of regulated entity undertaking the securitisation transaction. Market participants, particularly originators and arrangers involved in structuring securitisation transactions during the interim period, should take note of the proposed October 1, 2026 effective date and factor the same into their transaction timelines. Transactions that are currently under discussion or expected to be structured around the proposed commencement date may require additional time to assess and incorporate the proposed regulatory requirements, including dematerialisation of SNs, compliance with the minimum investment-size requirement upon subsequent transfers, and the necessary contractual obligations to be incorporated into transaction documentation. As the amendments remain at the draft stage, stakeholders should closely monitor the outcome of the consultation process and any modifications that may be introduced before the RBI issues the final directions. *Last Updated on 19 August, 2026* Get King Stubb & Kasiva’s legal updates in your Google feed[![Add King Stubb & Kasiva as a preferred source on Google](https://ksandk.com/wp-content/uploads/google_preferred_source_badge_light_en@2x.png)](https://www.google.com/preferences/source?q=https://ksandk.com/) --- ## Office Locations - [New Delhi](https://ksandk.com/locations/top-corporate-law-firm-in-delhi/) (HQ): +91-11-41318190 | info@ksandk.com - [Mumbai](https://ksandk.com/locations/top-corporate-law-firm-in-mumbai/): 3 offices (Nariman Point, Lower Parel, Andheri) | mumbai@ksandk.com - [Bangalore](https://ksandk.com/locations/top-corporate-law-firm-in-bangalore/): bangalore@ksandk.com - [Chennai](https://ksandk.com/locations/chennai/): chennai@ksandk.com - [Hyderabad](https://ksandk.com/locations/hyderabad/): hyderabad@ksandk.com - [Pune](https://ksandk.com/locations/pune/): pune@ksandk.com - [Kochi](https://ksandk.com/locations/kochi/): kochi@ksandk.com ## Contact - [Contact Page](https://ksandk.com/contact-us/) - General: info@ksandk.com | +91-11-41318190 - WhatsApp: +91-7428567444 - [Privacy Statement](https://ksandk.com/privacy-statement/) - [Terms of Use](https://ksandk.com/terms-of-use/)