RBI Extends NBFC-IFC Large Exposure Limits to Upper Layer IDF-NBFCs via Fourth Amendment Directions, 2026

Overview of the Regulatory Development

The Reserve Bank of India has introduced a significant amendment to the concentration risk management framework governing Non-Banking Financial Companies. Through the Reserve Bank of India (Non-Banking Financial Companies – Concentration Risk Management) Fourth Amendment Directions, 2026, issued on August 25, 2026, bearing reference DOR.CRE.REC.210/07-03-008/2026-27, the RBI has revised the large exposure framework specifically as it applies to Infrastructure Debt Fund-Non-Banking Financial Companies (IDF-NBFCs) classified under the Upper Layer of the regulatory architecture.

This amendment carries immediate regulatory force and represents a deliberate policy move to align the exposure norms applicable to IDF-NBFCs in the Upper Layer with those already in place for NBFC-Infrastructure Finance Companies (NBFC-IFCs).

Background: The 2025 Concentration Risk Directions

To appreciate the significance of this amendment, it is essential to understand the foundational framework it modifies.

The Reserve Bank of India (Non-Banking Financial Companies – Concentration Risk Management) Directions, 2025, issued on November 28, 2025, serve as the primary concentration risk governance framework for NBFCs operating in India. These directions comprehensively address:

  • Large exposure norms applicable across different categories of NBFCs
  • Exposure limits to individual borrowers, group entities, and connected counterparties
  • Chapter-wise regulatory segregation based on the layer classification of NBFCs (Base Layer, Middle Layer, Upper Layer, and Top Layer)

The Fourth Amendment Directions now modify this 2025 framework by inserting a new provision specifically targeting IDF-NBFCs subject to Upper Layer regulations.

What Has Changed: The Core Amendment

Insertion of Paragraph 39A in Chapter IV

The operative change brought about by this amendment is the insertion of a new paragraph 39A within Chapter IV — Guidelines Applicable to NBFC – Upper Layer of the 2025 Directions. This new paragraph is placed immediately following existing paragraph 39.

The text of the newly inserted paragraph 39A reads as follows: