RBI issues Non-Fund Based Credit Facilities Directions 2025

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  • Last Updated on 8 August, 2025

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RBI Non-Fund Based Credit Facilities 2025 guarantees co-acceptances partial credit enhancement NBFCs HFCs RBI guidelines

Circular no. RBI/DOR/2025-26/140 DOR.STR.REC.45/13.07.010/2025-26; Dated: 06.08.2025

1. Introduction of the Directions


The Reserve Bank of India (RBI) has released the Non-Fund Based Credit Facilities Directions, 2025. These directions aim to provide a comprehensive regulatory framework for the extension of non-fund based credit facilities, ensuring greater uniformity, risk management, and prudential oversight across the financial sector.

2. Applicability


The new directions are applicable to a wide range of financial institutions, including Commercial Banks, Primary (Urban) Co-operative Banks, All India Financial Institutions, and Non-Banking Financial Companies (NBFCs). By covering such a broad spectrum of regulated entities, the RBI seeks to ensure consistent practices and safeguard financial stability across multiple segments of the credit ecosystem.

3. Coverage of Provisions


The guidelines set out detailed norms relating to the conditions under which guarantees and co-acceptances can be issued, along with specific requirements for other types of guarantees. They also define the regulatory parameters for Partial Credit Enhancement (PCE) to support creditworthiness in debt instruments. These measures are designed to enhance transparency and minimise risks associated with non-fund based credit exposures.

4. Special Conditions for PCE

In addition to general provisions, the directions introduce specific conditions for providing PCE to bonds issued by NBFCs and Housing Finance Companies (HFCs). These conditions are intended to strengthen the credibility of such instruments, protect the interests of investors, and ensure that credit enhancement is extended in a prudent and well-monitored manner.

Click Here To Read The Full Circular 

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied