Some of our readers expressed that in view of the promotion season in Banks, Sillypoint should cover the selected circulars from RBI. We are producing a gist of selected circulars from 1st July to 10th Sept. After receiving response of the readers, we will publish selected circulars from 1st April to 30th June 2025.
SELECTED RBI CIRCULARS UPDATE 1st JULY TO 10TH SEPT
| Cir Ref & Date | Subject | Gist |
| 1.RBI/2025-26/73-CO.DPSS.RLPD.No.S536/04-07-001/2025-2026 dt 13/8/2025 | Introduction of Continuous Clearing and Settlement on Realisation in Cheque Truncation System | Implementation in 2 phases i.e from 4th Oct 2025 & 2nd phase from 3rd Jan 2026.From Batch processing system to continuous clearing.Single presentation session from 10 am to 4 pm.In Phase 1, confirmation timing will be between 10 am to 7 pmIn Phase 2, confirmation timing will be on T + 3 clear hours basis. (T=time of submission) |
| 2.RBI/2025-26/72 A.P. (DIR Series) Circular No. 09 dated 12/8/2025 | Investment in Government Securities by Persons Resident Outside India through Special Rupee Vostro account | Persons resident outside India that maintain a Special Rupee Vostro Account (SRVA) for international trade settlement in Indian Rupees may invest their rupee surplus balance in the aforesaid account in Central Government Securities (including Treasury Bills). |
| 3.RBI/2025-2026/71 A.P. (DIR Series) Circular No.08 dated 05/08/2025 | International Trade Settlement in Indian Rupees (INR) | AD (Authorised Dealer) banks to open Special Rupee Vostro Accounts (SRVAs) of overseas correspondent banks without referring to the Reserve Bank for approval. |
| 4.RBI/2025-26/65 DOR.STR.REC.39 /21.06.008/2025-26 dated 10/07/2025 | Basel III Capital Regulations – External Credit Assessment Institutions (ECAIs) – CareEdge Global IFSC Limited | It has been decided to permit banks to also use the ratings of M/s CareEdge Global IFSC Limited for risk weighting their claims on non-resident corporates originating at International Financial Services Centre (IFSC). Risk Weights: AAA : 20% AA : 30% A : 50% BBB : 100% BB & below : 150% Other approved agencies Fitch, Moody’s, S&P. (Refer my blog on S&P India Rating Upgrade) |
| 5.RBI/2025-26/64 DoR.MCS.REC.38/01.01.001/2025-26 dated 02/07/2025 | Reserve Bank of India (Pre-payment Charges on Loans) Directions, 2025 | Directions are applicable w.e.f 1/1/2026. Commercial Banks will not charge pre payment penalty on loans to individuals & MSEs.Other than Individuals & MSEs, on Term Loans Pre Payment Penalty can be charged to the extent of amount prepaid.In case of cash credit/ overdraft facilities, pre-payment charges on closure of the facility before the due date shall be levied on an amount not exceeding the sanctioned limit, if borrower has not informed his intention as per agreement. |
- https://website.rbi.org.in/documents/d/rbi/circulardatedaugust132025cts
- https://website.rbi.org.in/documents/d/rbi/issueofcircularandupdateaug122025
- https://website.rbi.org.in/documents/d/rbi/internationaltradesettlementinindianrupees
- https://website.rbi.org.in/documents/d/rbi/circularbaseliiicapitalregulationsecaicgil-1-
- https://website.rbi.org.in/documents/d/rbi/circularonforeclosurecharges02072025-1-
Subject: Reserve Bank of India (Non-Fund Based Credit Facilities) Directions, 2025
https://website.rbi.org.in/documents/d/rbi/rbinonfundbasedcreditfacilitiesdirections2025
Gist of the Directive:
Applicable from : 1st April 2026 or any earlier date decided by RE (Regulated Entity)
Co Acceptance of Bills: means an undertaking to make payment to the drawer of the bill (seller/ exporter) on due date if the buyer/ importer fails to make the payment on that date.
Obligor: refers to a party against whose obligations, financial or otherwise, a NFB facility has been issued. In the case of guarantees, the obligor may also be termed as ‘principal debtor’, as defined under the Indian Contract Act, 1872.
RE (Regulated entity) will issue NFB facility only to customers having Fund based facility with the RE, except:
a. Derivative contracts entered into by RE with counterparty.
b. Partial Credit enhancement facility.
c. NFB facilities issued based on the counter guarantee of another RE.
d. NFB facilities on behalf of an obligor who has not availed any fund based facility from any RE in India.
e. NFB facilities extended by a RE against No Objection Certificate issued by the RE/ REs which has/ have provided fund based facility to the obligor.
f. NFB facilities which are fully secured by eligible financial collateral.
A RE shall not issue a NFB facility to any entity assuring redemption/ repayment of funds raised by any entity via deposits, issuance of bonds, or in any other form, unless specifically permitted by the Reserve Bank.
Once a NFB facility devolves and is converted into a fund based facility, then the prudential norms shall be as applicable to fund based facilities.
Guarantee favouring another RE
- A RE shall, in general, not provide a guarantee favouring another RE to enable it to provide any fund based credit facility to an obligor, except trade related transactions.
- However, a RE may provide a guarantee favouring another RE for a NFB facility extended by the latter. Such guarantee issued by a RE shall be treated as an exposure on the obligor, for all purposes including for the calculation of capital adequacy.
Guarantee to Stock Brokers:
Only Scheduled Commercial Banks (SCBs) may issue guarantees on behalf of stock/ commodity brokers in favour of stock/ commodity exchanges in lieu of security deposit. SCBs may also issue guarantees in lieu of margin requirements as per exchange regulations.
Partial Credit Enhancement:
- SCBs (excluding RRBs), AIFIs, NBFCs including HFCs in Middle Layer #and above may provide Partial Credit Enhancement (PCE) to
- Bonds issued by corporates/ special purpose vehicles (SPVs) for funding all types of projects.
- Bonds issued by Non-deposit taking NBFCs with asset size of ₹1,000 crore and above.
- Bonds issued by Municipal Corporations
- Tenor of the Bond shall not be less than 3 years
- Objective of allowing REs to extend PCE is to enhance the credit rating of the bonds issued so as to enable corporates to access the funds from the bond market on better terms.
- Max PCE exposure limit by a single RE : upto 50% of Bond issue size.
- PCE cannot be provided in the form of guarantee.
- Minimum pre enhanced rating should be BBB-.
- Bonds should be rated by minimum 2 ECAIs(External Credit Assessment Institution).
- Undrawn PCEs classified as ‘Contingent Liability-others’ in Balance sheet and drawn PCEs as on Balance Sheet Advance.
- Aggregate PCE exposure should not exceed 20% of Tier 1 Capital of RE.
[# Layers of NBFC – Base Layer – Asset size below 1000 cr; Middle Layer – Asset size 1000 cr & above; Upper Layer – Specifically identified by RBI ; Top Layer – Specified by RBI from Upper Layer ]
2. RBI/2025-26/139 DOR.STR.REC.44/13.07.010/2025-26 dated 06/08/2025
Subject: Reserve Bank of India (Co-Lending Arrangements) Directions, 2025
https://website.rbi.org.in/documents/d/rbi/mdcolendingarrangement
Gist of the Directive:
Applicability:
- Applicable from : 1st Jan 2026 or any earlier date decided by RE (Regulated Entity)
- Directions are applicable on Scheduled Commercial Banks, AIFIs and NBFCs.
- Digital lending arrangements shall continue to be governed by the Reserve Bank of India (Digital Lending) Directions, 2025 (MD-DLD) as amended from time to time. Provided that, any digital lending arrangement involving co-lending by the REs shall, without derogation to the MD-DLD, be guided by the provisions of these Directions.
- These Directions shall not apply to loans sanctioned under multiple banking, consortium lending, or syndication.
- CLA refers to an arrangement, formalised through an ex-ante agreement, between a RE which is originating the loans (‘originating RE’) and another RE which is co-lending (‘partner RE’), to jointly fund a portfolio of loans, comprising of either secured or unsecured loans, in a pre-agreed proportion, involving revenue and risk sharing.
[Explanation: Suppose a NBFC originates some loans and a Commercial Bank agrees to participate in those lending, it will be called CLO]
General Guidelines:
- Each RE under a CLO shall retain at least 10% share of individual loan.
- Agreement with borrowers should clearly mention about REs and their role in the lending arrangement.
- REs engaging in the CLA for loans eligible to be classified under priority sector lending can claim priority sector status in respect of their share of credit under CLA.
- NBFCs shall adhere to the applicable accounting standards, while booking of unrealised profit under CLAs, if applicable. However, such profits, shall be deducted from CET 1 capital or net owned funds for meeting regulatory capital adequacy requirement till the maturity of such loans.
Interest rate & other fees:
Blended interest rate will be charged. Means an average of the ROI charged by all REe under CLA, from their borrowers of equivalent risk profile.
Operational arrangements:
- The CLA shall ensure that the respective shares of the REs are reflected in the books of REs without delay, in any case not later than 15 calendar days from the date of disbursement.
- If the originating RE is unable to transfer the share of the exposure to the partner RE under CLA within 15 calendar days for any reason, then the loan/s shall remain on the books of the originating RE and can be transferred to other eligible lenders only under the provisions of Master Directions – Transfer of Loan Exposure, 2021 (MD-TLE).
- Each RE shall maintain a borrower’s account individually for its respective share.
- All transactions, shall be routed through an escrow account maintained with a bank (which could also be one of the REs involved in CLA).
- A RE involved under CLA shall comply with the prescribed norms under the Master Direction – Know Your Customer (KYC) Direction, 2016 as amended from time to time. Partner RE may rely upon the originating RE for “Customer Identification Process” as per the provisions of the said Master Directions on KYC.
Other matters:
Originating RE may provide default loss guarantee up to five per cent of loans outstanding in respect of loans under CLA
REs shall also make appropriate disclosures in their financial statements, under ‘Notes to Accounts’, relating to necessary details of CLAs on an aggregate basis.
3. RBI/2025-26/138 DOR.STR.REC.43/21.04.048/2025-26 dated 29/07/2025
Subject: Reserve Bank of India (Investment in AIF) Directions, 2025
https://website.rbi.org.in/documents/d/rbi/masterdirectionsaifs-1-
Gist of the Directive:
Applicability:
- Applicable from : 1st Jan 2026 or any earlier date decided by RE (Regulated Entity)
- Directions are applicable on Commercial Banks, AIFI, NBFC, Primary Urban/Central/State Co op Banks.
AIF: Alternative Investment Fund
‘Debtor company’ of a RE shall imply any company to which the RE currently has or previously had a loan or investment exposure (excluding equity instruments) anytime during the preceding twelve months.
‘Equity instrument’ shall refer to equity shares, compulsorily convertible preference shares (CCPS) and compulsorily convertible debentures (CCD).
Limit on Investment & Provisioning:
- No RE shall individually contribute more than 10 per cent of the corpus of an AIF Scheme.
- Collective contribution by all REs in any AIF Scheme shall not be more than 20 per cent of the corpus of that scheme.
- If a RE contributes more than five per cent of the corpus of an AIF Scheme, which also has downstream investment (excluding equity instruments) in a debtor company of the RE, then the RE shall be required to make 100 per cent provision to the extent of its proportionate investment in the debtor company through the AIF Scheme, subject to a maximum of the direct loan and/ or investment exposure of the RE to the debtor company. #
- Notwithstanding the provisions of above paragraph, if a RE’s contribution is in the form of subordinated units, then it shall deduct the entire investment from its capital funds – proportionately from both Tier-1 and Tier-2 capital (wherever applicable).
# Explanation:
A is an AIF with 100 crore corpus.
B is an RE.
C is debtor Company where B is already having exposure of Rs. 2 crore.
B invests Rs.8 crore in A (more than 5% of corpus)
A invests Rs. 10 crore in C (10% of the corpus)
Proportionate investment of RE shall be 8 * 10% = 0.80
Provision to be made by B is 0.80 crore.
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