Archive · 7 Aug 2025
RBI Directives to Cut Corporate Funding Costs
The Reserve Bank of India is changing the rules to help companies borrow money more cheaply.
They're making it easier for companies to get better credit ratings, which means they can offer lower interest rates on bonds.
This will help them raise money, especially for big projects like infrastructure.
These rules apply to banks and financial companies and will start in April 2026.
RBI's new guidelines aim to help corporations raise cheaper funds.
The directives relate to non-fund based credit facilities, particularly partial credit enhancement (PCE).
These changes should improve credit ratings of corporate bonds.
The guidelines will come into effect from April 1, 2026.
RBI has expanded eligibility, including PCE for bonds issued by certain NBFCs.
- Who
- The Reserve Bank of India (RBI).
- What
- RBI issued directives for non-fund based credit facilities to help corporations raise funds.
- When
- Effective April 1, 2026.
- Where
- India
- Why
- To enhance credit intermediation, improve governance, and broaden funding avenues for corporations.
- Effective Date
- April 1, 2026
- Focus
- Non-fund based credit facilities
- Key Feature
- Partial Credit Enhancement (PCE)
- Applicable to
- Banks, cooperative banks, AIFIs, and NBFCs/HFCs
- PCE Limit
- Up to 50% of bond issue size
