RBI Drafts New Credit Framework: AIFIs Authorized to Finance SEBI-Registered InvITs
The Reserve Bank of India (RBI) has released a significant proposal aimed at widening the financing avenues for the infrastructure sector. Through the release of the Reserve Bank of India (All India Financial Institutions – Credit Facilities) Amendment Directions, 2026, the central bank has outlined a mechanism allowing All India Financial Institutions (AIFIs) to extend credit facilities to Infrastructure Investment Trusts (InvITs).
These draft directions, formulated under the powers conferred by Section 45L of the Reserve Bank of India Act, 1934, seek to modify the existing 2025 Directions. The proposed changes introduce specific prudential safeguards, eligibility criteria, and monitoring requirements for such lending activities.
Regulatory Context and Effective Date
The primary objective of this amendment is to facilitate credit flow to the infrastructure sector while ensuring that AIFIs maintain robust risk management practices. The RBI has proposed that these directions will become effective from July 1, 2026, or an earlier date if an AIFI chooses to adopt the framework in its entirety before the deadline.
The amendment specifically targets 'Chapter VI – Other Instructions on Credit Facilities' of the master directions. It proposes the deletion of paragraphs 123 to 126 and the insertion of a comprehensive new section, specifically paragraphs 126A to 126F, titled ‘Lending to Infrastructure Investment Trusts (InvITs)’.