RBI's role in infrastructure is mainly through credit policy, financial market development, and regulatory support for long-term financing. ## Priority Sector Lending 1. Agriculture and Social Infrastructure has been included as eligible categories under priority sector. [^1] 2. Non-achievement of Priority Sector Targets - All banks (excluding UCBs under all-inclusive directions) reporting shortfall in priority sector lending vis-à-vis the prescribed target/sub-targets shall be allocated amounts for contribution to the Rural Infrastructure Development Fund ([RIDF](https://www.nabard.org/content1.aspx?id=573&catid=8&mid=8)) and other funds with NABARD/NHB/SIDBI/MUDRA Ltd., as decided by the Reserve Bank from time to time. 3. COVID-19 measures for healthcare infrastructure and services, and contact-intensive sectors ## AIl India Financial Institutions (AIFI) 1. [AIFIs](All%20India%20Financial%20Institutions%20(AIFI).md) are RBI classified DFIs, and provide long-term finance to specific sectors like infrastructure, agriculture, or housing where banks are less active. So it is a category defined by RBI. The term DFI stands for any institution providing long-term development finance. 2. As of Jan-2026, RBI regulates 5 AIFIs, which are NaBFID, NABARD, SIDBI, EXIM, NHB ## Bank Lending 1. The chapter on "Infrastructure Financing" in Reserve Bank of India (Commercial Banks – Credit Facilities) Directions, 2025 dated Nov 28, 2024 governs lending by banks to infrastructure sector 2. [June 19, 2025](RBI_Press%20Release_20250619_RBI%20Issues%20the%20Reserve%20Bank%20of%20India%20(Project%20Finance)%20Directions,%202025.pdf) - RBI relaxed provisioning for infrastructure sector, and reduced it to 1% on under-construction projects from proposed/draft 5%, 1.25% for commercial real estate. 3. Chapter on "Exposure Norms" in Reserve Bank of India (Commercial Banks – Concentration Risk Management) Directions, 2025 4. Related Master directions 1. [Reserve Bank of India (Commercial Banks – Credit Facilities) Directions, 2025](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=13156) 2. [Reserve Bank of India (Commercial Banks – Concentration Risk Management) Directions, 2025](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=13152) 1. [Reserve Bank of India (Commercial Banks – Prudential Norms on Capital Adequacy) Directions, 2025](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=13159). 3. [Reserve Bank of India (Commercial Banks – Income Recognition, Asset Classification and Provisioning) Directions, 2025](https://rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=13146) 4. [Reserve Bank of India (Commercial Banks – Transfer and Distribution of Credit Risk) Directions, 2025](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=13151). 5. [Reserve Bank of India (Commercial banks – Resolution of Stressed Assets) Directions, 2025](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=13145) 6. [Reserve Bank of India (Commercial Banks – Treatment of Wilful Defaulters and Large Defaulters) Directions, 2025](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=13144) 5. Provisioning in case of infrastructure loans is covered in [Reserve Bank of India (Commercial Banks – Income Recognition, Asset Classification and Provisioning) Directions, 2025](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=13146) 6. July 2014 - RBI had introduced, which is popularly known as 5/25 refinancing scheme (long tenure loans). It allowed restructuring without NPA classification (earlier schemes), that is refinancing every 5 years, for a longer amortization period of 25 years. 7. InvITs/REITs 1. [Oct 14, 2019](RBI_Notification_20191014_Lending%20by%20banks%20to%20InvITs.pdf) - RBI allowed banks to lend to Infrastructure Investment Trusts 2. [Feb 2026](RBI_Directions_Draft_202602_Reserve%20Bank%20of%20India%20(Commercial%20Banks%20–%20Credit%20Facilities)%20Second%20Amendment%20Directions,%202026%20–%20Draft.pdf) - RBI proposed allowing Banks to lend directly to REITs, to be adopted from July, 2026 ## External Commercial Borrowing 1. [Feb 09, 2026](RBI_Regulations_Amendments_2060209_Foreign%20Exchange%20Management%20(Borrowing%20and%20Lending)%20(First%20Amendment)%20Regulations,%202026.pdf) - RBI expanded the definition of Infrastructure for the purpose of [ECB](ECB%20(Borrowings%20in%20Rupee%20and%20FCY).md) to include mining, exploration and refinery sector. 2. [Feb 16, 2026](RBI_Regulations-Amendments_20260216_Foreign%20Exchange%20Management%20(Borrowing%20and%20Lending)%20(First%20Amendment)%20Regulations,%202026.pdf) - FEM(Borrowing and Lending) (First Amendment) Regulations, 2026 dated February 09, 2026 were published in the [official gazette](https://rbidocs.rbi.org.in/rdocs/content/pdfs/Gazette16022026_E.pdf) on February 16, 2026. ## Corporate Bond Market 1. RBI has also pushed reforms in corporate bond markets. So here the goal is to move funding from banks to markets. 2. Unlisted bonds in India are regulated by SEBI with compliance requirements under the Companies Act, 2013, and guidelines from the RBI for [NBFCs](NBFCs.md). 3. Listed Bonds are regulated by SEBI under the Issue and Listing of Non-Convertible Securities Regulations, 2021. Bonds listed by NBFCs are regulated by the RBI for operational and prudential norms, and by the SEBI regarding issuance, listing, and trading on stock exchanges 4. All Commercial Paper (CP) and Non-Convertible Debenture (NCD) of original or initial maturity upto 1 year are [regulated](Call,%20Notice%20and%20Term%20Money.md#Master%20Directions) by the RBI. 5. Must Read - [Report](GoI_Reports_202512_Deepening%20the%20Corporate%20Bond%20Market%20in%20India.pdf) titled 'Deepening the Corporate Bond Market in India' by Niti Aayog, December 2025 6. [FAQs](https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doFaq=yes) on the Corporate Bond market by SEBI ## IDF & IFC 1. April, 2010 - RBI introduced Infrastructure Finance Company (IFC). It was the fourth category of NBFC, other than Asset Finance Companies, Loan Companies and Investment Companies. 2. 2011-2012 - Two new categories of NBFCs, viz., Infrastructure Debt Funds-NBFC (NBFC-IDF) and the Micro Finance Institution (NBFC-MFI) were created and brought under separate regulatory frameworks 3. September 2011. 1. [Box VI.3 NBFCs - Infrastructure Debt Fund](RBI_Annual%20Report_2012.pdf#page=133&selection=51,0,52,32) in RBI's Annual Report 2012 4. They can be mutual funds (trusts) (regulated by SEBI (Mutual _Funds_) Regulations, 1996) or as _companies_ (_NBFCs_) called IDF-NBFCs. Infrastructure Funds were also included under “Category I Alternative Investment Fund” by SEBI recently. 5. 2023 - Infrastructure Debt Fund (IDF-NBFC) were allowed to raise funds through loans under ECB ## Refinancing & liquidity support to AIFIs 1. While the RBI does not provide "regular" day-to-day operational refinancing to NABARD and SIDBI, it provides special liquidity facilities and special refinance facilities during times of financial stress or to meet specific sectoral funding needs, such as during the COVID-19 pandemic ## Related Notes 1. [Corporate Bonds](Corporate%20Bonds.md) ## References ### [[Speeches & Media Interactions|Speeches]] 1. Rajeshwar Rao. (Jul 18, 2025). ==Catalysing Sustainable & Green Infrastructure Financing for Achieving Net Zero== - Inaugural Address delivered by Shri M Rajeshwar Rao, Deputy Governor, Reserve Bank of India - July 03, 2025 - at the Conference on Green Infrastructure Finance at College of Agriculture Banking, RBI, Pune. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1512) 2. M. Rajeshwar Rao. Sep 12, 2024. ==Managing the Challenges in Financing Infrastructure: The Road Ahead for NaBFID== - Keynote address delivered by Shri M. Rajeshwar Rao, Deputy Governor, Reserve Bank of India - September 12, 2024 - at Infrastructure Conclave organised by National Bank for Financing Infrastructure and Development (NaBFID) at Mumbai. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1463) 3. N. S. Vishwanathan. Nov 28, 2016. ==Issues in Infrastructure Financing in India== - Shri N. S. Vishwanathan, Deputy Governor - November 15, 2016 - at 6th National Summit organised by ASSOCHAM on ’Infrastructure Finance - Building a New India’, Mumbai. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1030) 4. Harun R Khan. (Aug 12, 2015). ==Financing for Infrastructure: Current Issues & Emerging Challenges== - Keynote address delivered by Shri Harun R Khan, Deputy Governor at the Infrastructure Group Conclave of the SBICAP at Aamby Valley on August 8, 2015. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=968) 5. S. S. Mundra. (Nov 21, 2014). ==Economic Outlook and Role of Monetary Policy in funding Infrastructure projects== - Address by Shri S. S. Mundra, Deputy Governor, Reserve Bank of India at ‘Citi's Investor Summit: India Poised for Higher Growth’ in New Delhi on November 17, 2014. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=927) 6. K.C. Chakrabarty. (Aug 20, 2013). ==Infrastructure Financing By Banks In India: Myths and Realities== - Keynote address delivered by Dr. K.C. Chakrabarty, Deputy Governor, Reserve Bank of India at the Annual Infrastructure Finance Conclave organised by SBI Capital markets Limited at Agra on August 9, 2013. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=831) 7. Harun R Khan. (Jul 18, 2013). ==Financing Strategies for Urban Infrastructure: Trends and Challenges== - Inaugural address delivered by Shri. Harun R Khan, Deputy Governor, Reserve Bank of India at the Conference on Financing Strategies for Urban Infrastructure organized by the Centre for Advanced Financial Research and Learning (CAFRAL) on July 18, 2013 at Mumbai. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=824) 8. Harun R. Khan. (Jan 16, 2012). ==Infrastructure Financing in India – Progress & Prospects== - Address delivered by Shri. Harun R. Khan, Deputy Governor, Reserve Bank of India at the Diamond Jubilee International Conference on Frontiers of Infrastructure Finance 2011 organized by the Vinod Gupta School of Management & RCG School of Infrastructure Design and Management, Indian Institute of Technology, Kharagpur on December 29, 2011. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=655) 9. K. C. Chakrabarty. (Feb 05, 2010), ==Infrastructure Finance: Experiences and the Road Ahead== - Address by Dr .K. C. Chakrabarty, Deputy Governor, RBI at the 13th Financial Services Convention of Bombay Management Association on 5th February 2010 at Mumbai. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=468) 10. Rakesh Mohan. (Nov 07, 2006). ==State of the Indian Economy== - Inaugural Address of Dr. Rakesh Mohan, Deputy Governor, RBI at the 2nd Annual Indian Securities Infrastructure & Operations Forum 2006 at Mumbai on November 7, 2006. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=312) 11. Rakesh Mohan. May 21, 2003. ==Infrastructure Development in India: Emerging Challenges== - by Rakesh Mohan Deputy Governor, Reserve Bank of India,,World Bank Annual Bank Conference on Development Economics at Bangalore on May 21-23, 2003. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=141) 12. Nov 11, 1998. ==Infrastructure Financing : Status and Issues== - Dr.Y.V. Reddy, at the workshop on the Role of Financial Institutions in the Development of Infrastructure at Planning Commission, Yojana Bhavan, New Delhi on November 11, 1998 ### [[Publications (Data Releases) & Research#Publications|Publications]] 1. Gunjeet Kaur, L. Lakshmanan, Raj Rajesh and Naveen Kumar**. (17 Aug 2010). Infrastructure Financing Global Pattern and The Indian Experience. [RBI Staff Studies](https://rbi.org.in/content/Occas_RBIStaff_Studies.aspx). [pdf](RBI_Occasional_Staff%20Studies_20100817_Infrastructure%20Financing%20Global%20Pattern%20and%20The%20Indian%20Experience.pdf) 2. Ashutosh Raravikar and Abhishek Ranjan. RBI. (Sept 24, 2024). Infrastructure - An Engine of India’s Growth Express. [Link](https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=23648). RBI Bulletin-Sept 2025. [pdf](RBI_Monthly_Bulletin_Article_20250924_Infrastructure%20-%20An%20Engine%20of%20India’s%20Growth%20Express.pdf) ### Others 1. Niti Aayog. (December 2025). Deepening the Corporate Bond Market in India. [pdf](GoI_Reports_202512_Deepening%20the%20Corporate%20Bond%20Market%20in%20India.pdf) [^1]: [Master Directions - Reserve Bank of India (Priority Sector Lending – Targets and Classification) Directions, 2025](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=12799) dated [March 24, 2025](RBI_Press%20Release_20250324_RBI%20Releases%20Revised%20Priority%20Sector%20Lending%20Guidelines.pdf)