Main Note - [NBFCs](NBFCs.md) With the progressive deregulation of credit, prudential norms primarily serve as regulatory safeguards. These norms, issued from time to time, provide guidance to NBFCs on the design and delivery of credit-related products and services, and consolidate the instructions issued to them on credit facilities. ## Nov 28, 2025 1. [Reserve Bank of India (Non-Banking Financial Companies – Credit Facilities) Directions, 2025](https://rbi.org.in/scripts/BS_ViewMasDirections.aspx?id=12957) was issued. ### Aug 6, 2026 *(Draft)* 1. [Aug 6, 2026](https://rbi.org.in/scripts/Bs_viewcontent.aspx?Id=5135) -RBI issued Draft Reserve Bank of India (Non-Banking Financial Companies – Credit Facilities) Amendment Directions, 2026. 1. RBI is proposing to define "revolving credit" versus "term loan" for the first time. A term loan must be a fixed amount, disbursed once (or in tranches), with a set repayment schedule, and crucially, once repaid it cannot be re-drawn/replenished. 2. It also says that NBFC shall only offer credit products which are in nature of term loans and shall not offer any revolving credit products" with only one exception-NBFCs specifically authorized to issue credit cards. 3. It also deletes the "Demand/Call Loans" category entirely from the list of instructions. 2. <span style="color:#C21E56;">Why this is source of panic for the industry (NBFCs and for banks lending to such NBFCs)?</span> 1. Revolving credit is the _backbone_ of several major NBFC/fintech business models. Many popular digital credit apps operate exactly this way, that is they approve a limit, borrower draws and repays repeatedly, limit refreshes. Also business overdraft/cash credit facilities would have to be then offered as fixed term loans. 2. Many NBFCs offer gold-backed revolving credit lines (gold loan overdraft products), not fixed term loans. 3. Any co-lending/BNPL-style partnership between fin-techs and NBFCs (or Banks and NBFCs) will be got impacted. 3. The concern is revolving credit is harder to monitor for over-leverage (across different lenders), encourages repeat unmonitored borrowing. 4. If finalised, it would restructure a large chunk of the NBFC/fintech lending industry. ### July 15, 2026 - 2nd Amendment [Jul 15, 2026](https://rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=13561) - RBI (Non-Banking Financial Companies – Credit Facilities) Second Amendment Directions, 2026. 1. If a big project can be split into independent, standalone-viable units, like a multi-phase power plant, or separate segments of a highway, an NBFC can now finance each unit separately, with its own financial closure, as long as each piece is individually appraised as viable on its own. It gives flexibility and lets NBFCs break large projects into smaller financeable parts. 2. If a power generation project bundles in its own transmission/evacuation infrastructure, like a power plant that also builds the lines carrying electricity out to the grid, the ROW requirement for just the transmission portion, before lending, should follow sub-para (3), that is, can be decided flexibly by the NBFC, rather than the 50-75% requirement for other projects. ### Feb 13, 2026 - Amendment [Feb 13, 2026](https://rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=13293) - RBI (Non-Banking Financial Companies – Credit Facilities) Amendment Directions, 2026 1. Before the amendment, para 25(1) read as: 1. (1) Recognition of individual loan assets in the portfolio as Non-Performing Asset (NPA) and consequent provisioning shall be the responsibility of the NBFC as per the [Reserve Bank of India (Non-Banking Financial Companies – Income Recognition, Asset Classification and Provisioning) Directions, 2025](https://rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=12948) irrespective of any DLG cover available at the portfolio level. 2. After the amendment: 1. Asset classification of individual loan assets and consequent provisioning requirement shall be in terms of the [Reserve Bank of India (Non-Banking Financial Companies – Income Recognition, Asset Classification and Provisioning) Directions, 2025](https://rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=12948). 3. Both versions apply to DLG-covered loans, and just the extra reminder "irrespective of DLG cover" was removed as it wasn't changing anything real. 4. What is DLG and LSP here? It is a risk-sharing contract. Under a DLG arrangement, the LSP promises to compensate the NBFC or bank for any financial losses caused if borrowers default, up to a specific agreed-upon % (capped by the Reserve Bank of India at 5% of the loan portfolio). ## Bank Finance to NBFCs 1. Nov 28, 2025 - Reserve Bank of India (Commercial Banks – Credit Facilities) [Directions](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=13156), 2025 1. April 01, 2025 - [Master Circular](https://rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=12823) - Bank Finance to Non-Banking Financial Companies (NBFCs) ## Related Notes 1. [NBFCs](NBFCs.md) 2. [NBFCs-MFI](NBFCs-MFI.md) 3. [NBFCs - Master Directions](NBFCs%20-%20Master%20Directions.md) 4. [NBFCs - Concentration Risk](NBFCs%20-%20Concentration%20Risk.md) 5. [Department of Regulation (DoR)](Department%20of%20Regulation%20(DoR).md)