Archive · 6 Aug 2025
RBI Expands Credit Enhancement for Infrastructure Bonds
Imagine the government is helping companies get money to build things by making their bonds (like IOUs) seem safer.
The Reserve Bank of India (RBI) is letting more types of banks help with this.
These banks can now promise to pay back some of the money if the company can't, helping make bonds more attractive to investors.
This should help companies get funding more easily, starting from April 1, 2026.
RBI expands credit enhancement facility availability.
Commercial banks, NBFCs, and others can now offer partial credit enhancement.
PCE aims to improve debt security creditworthiness.
Lenders can provide PCE up to 50% of bond issues.
New regulations become effective from April 1, 2026.
- Who
- Reserve Bank of India (RBI).
- What
- RBI expands the availability of partial credit enhancement for bonds.
- When
- Effective from April 1, 2026.
- Where
- India
- Why
- To broaden funding sources for infrastructure financing and improve credit ratings of bonds.
- Entity
- RBI
- Facility
- Partial Credit Enhancement (PCE)
- Entities involved
- Commercial banks, co-operative banks, NBFCs, and DFIs
- Maximum PCE
- 50% of bond issue
- Minimum Bond Tenor
- 3 years (if PCE offered by NBFC)
