Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Amendment Directions, 2026

Under this notification, the Reserve Bank of India has amended the Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Directions, 2025, with effect from January 1, 2026. Specifically, Sr. No. 2(e) of the Table under paragraph 18(1) has been modified to revise the risk weights applicable to loans extended by NBFCs to “High-Quality Infrastructure Projects” (HQIP), as defined under the RBI (NBFC – Concentration Risk Management) Amendment Directions, 2026.

The amendment introduces a repayment-linked framework for determining risk weights. Where the borrower has repaid at least 2% of the sanctioned project debt, the exposure will now attract a risk weight of 75%, as against the earlier 50%. A lower risk weight of 50% will apply only where the borrower has repaid at least 5% of the sanctioned project debt. Accordingly, concessional capital treatment is now dependent on a higher threshold of repayment performance.

The notification further provides that if a project that qualifies as a High-Quality Infrastructure Project subsequently fails to meet the prescribed conditions, the exposure shall be subject to the higher risk weights specified under Sr. No. 3(e) or 3(g) of the Table, as applicable.

For the purpose of determining whether the repayment thresholds of 2% or 5% have been met, repayment must be calculated with reference to the total sanctioned project debt. Any additional debt sanctioned, including pursuant to a loan takeover or otherwise, is required to be clubbed with the previous loans sanctioned against the same project assets and/or cash flows for computing the repayment percentage.

Overall, the amendment aligns risk weights more closely with actual deleveraging and repayment performance, thereby tightening capital treatment where only minimal repayment has occurred.