Archive · 9 Nov 2025
RBI's Draft Guidelines on Infrastructure Lending Cause Concern for NBFCs
Imagine the bank that lends money for big projects, like building roads or power plants.
The Reserve Bank of India (RBI) is proposing new rules for how these banks should count the risk of lending money for these projects.
Currently, the rules are simple.
The new rules are more detailed and could make things trickier for the companies that lend money, called NBFCs.
They worry these new rules are complicated to follow and might not work as well.
Some analysts think the new rules are good because they look more closely at how safe a project is.
They believe it will help good projects, especially in renewable energy.
However, NBFCs are still figuring out exactly how these new rules will affect their business and whether they will make them want to lend more or less money for these big projects.
RBI's draft guidelines on risk weights for infrastructure lending have introduced a split risk weight structure of 50% and 75%, replacing the existing flat 50%.
NBFCs express concerns that the new framework is more complicated than current rules and may be difficult to implement.
Industry bodies like PFC and FIDC are reviewing the draft and gathering feedback from their members.
Analysts suggest the new guidelines are a positive step towards a more nuanced classification of infrastructure projects, potentially benefiting renewable energy.
The industry awaits further clarity on implementation and final guidelines before adjusting their strategies.
- Who
- Reserve Bank of India (RBI) and Non-Banking Financial Companies (NBFCs)
- What
- RBI released draft guidelines for risk weights in infrastructure lending, introducing a more complex framework that has caused concern among NBFCs.
- When
- The draft guidelines are set to be effective from April 1, with industry feedback being gathered.
- Where
- India
- Why
- To improve credit flow to infrastructure and align with broader policy goals by adopting a more nuanced classification of projects based on financial soundness and risk.
NBFC Concerns
Analyst Perspective
Complexity of New Framework
NBFC Concerns
NBFCs find the proposed split risk weight structure (50% and 75%) more complicated and difficult to implement compared to the current flat 50% for commissioned projects.
Analyst Perspective
Analysts view the shift to a more nuanced classification based on financial soundness, cash flow visibility, and counterparty risk as a positive step, aligning with policy goals.
Implementation Clarity
NBFC Concerns
Some NBFCs find the draft restrictive and confusing regarding implementation, suggesting RBI adopt a bank-like model linking provisioning to credit ratings.
Analyst Perspective
Analysts believe the new framework should benefit renewable energy projects and could improve the appetite of NBFC-Infrastructure Finance Companies (IFCs), although the impact on non-IFCs and overall lending appetite remains to be seen.
- Regulator
- Reserve Bank of India (RBI)
- Subject
- Draft guidelines for risk weights in infrastructure lending
- Proposed Change
- Split risk weight structure (50% and 75%) for high-quality infrastructure projects, replacing current flat 50% for commissioned projects.
- Effective Date
- April 1
- Key NBFC Stakeholders
- Power Finance Corporation (PFC), Aseem Infrastructure Finance, Finance Industry Development Council (FIDC)
- Analyst Group
- ICRA (A.M. Karthik)