The Reserve Bank of India has issued comprehensive amendment directions revising the risk-weighting framework for non-banking financial companies' exposure to infrastructure projects. The changes, which will take effect from April 1, 2026, aim to align capital requirements more closely with the underlying risk profile of operational projects and promote more accurate risk assessment in infrastructure financing.

The central bank developed these modifications after examining stakeholder feedback received on draft amendment directions issued on October 24, 2025. The RBI incorporated resulting modifications into the final directions, notifying both the Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Amendment Directions, 2026 and the Reserve Bank of India (Non-Banking Financial Companies – Concentration Risk Management) Amendment Directions, 2026.

Revised Risk Weight Structure

Under the new capital adequacy norms, loans extended by NBFCs to "high-quality infrastructure projects" will attract significantly lower risk weights, subject to specified conditions. The framework establishes a tiered structure based on debt repayment milestones:

The RBI clarified that repayment thresholds will be assessed based on total sanctioned project debt, including any additional debt sanctioned through loan takeovers. If projects initially classified as high-quality infrastructure projects subsequently fail to meet prescribed conditions, the exposures will revert to higher risk weights applicable under the existing infrastructure lending framework.

Qualification Criteria for High-Quality Projects

To qualify for preferential risk weights, infrastructure projects must meet stringent operational and financial criteria. Projects must have completed at least one year of operations after achieving commercial operations without breaching material lender covenants, and the exposure must be classified as 'standard' in the lender's books.

The framework requires that project revenues depend on concession or contractual rights granted by the Centre, state governments, public sector entities, or statutory bodies. These arrangements must include provisions protecting rights throughout the concession period, ensuring revenue stability and predictability.

Enhanced Contractual Safeguards

Lenders must benefit from comprehensive contractual protections to qualify for lower risk weights. Key safeguards include:

• Escrow or trust and retention account mechanisms to ring-fence cash flows
• Pari-passu charge over project assets
• Risk-mitigation features such as step-in rights or minimum termination payments
• Adequate financial arrangements for working capital and funding requirements
• Restrictions preventing borrowers from taking detrimental actions without lender consent

These protections ensure lenders maintain control over critical project elements while safeguarding their financial interests throughout the project lifecycle.

Implementation Timeline and Transition Provisions

The amendment directions will become effective from April 1, 2026, though NBFCs may adopt them earlier if implemented in full. The RBI has provided transition arrangements for existing exposures that currently attract lower risk weights but will be subject to higher weights under the revised norms.

For such exposures, NBFCs may continue applying existing risk weights until the next review or renewal, or March 31, 2027, whichever occurs earlier. This transition period allows financial institutions to adjust their portfolios and capital planning strategies without immediate disruption.

The RBI stated that these amendments aim to promote improved capital allocation and greater financial stability in infrastructure financing by NBFCs, reflecting a more nuanced approach to risk assessment in this critical sector.

The Reserve Bank of India has reported significant progress in the withdrawal of ₹2000 denomination banknotes, with 98.41% of the high-value currency successfully returned since the announcement in May 2023. The central bank's latest update demonstrates the effectiveness of its systematic approach to removing these banknotes from circulation.

Withdrawal Progress and Current Status

The RBI's data reveals substantial reduction in ₹2000 banknotes circulation over the past period:

The withdrawal process began when the RBI announced the decision to remove ₹2000 denomination banknotes from circulation on May 19, 2023. Since then, the total value of these banknotes in circulation has declined dramatically from ₹3.56 lakh crore to ₹5,669 crore at the close of business on December 31, 2025.

Multiple Return Channels Available

The RBI has established comprehensive facilities to ensure smooth return of the banknotes through various channels:

Bank Branch Network

A facility for deposit and exchange of ₹2000 banknotes was available at all bank branches across the country until October 7, 2023. This widespread network provided convenient access for the public to return their banknotes.

RBI Issue Offices

From October 9, 2023, the RBI's 19 Issue Offices began accepting ₹2000 banknotes directly from individuals and entities for deposit into their bank accounts. This additional channel ensures continued accessibility for banknote returns.

India Post Services

Members of the public can send ₹2000 banknotes through India Post from any post office within the country to any of the RBI Issue Offices for credit to their bank accounts. This service provides a convenient option for those unable to visit bank branches or RBI offices directly.

Legal Tender Status Maintained

The RBI emphasized that despite the withdrawal process, the ₹2000 banknotes continue to be legal tender. This means the remaining banknotes in circulation retain their validity and can still be used for transactions or exchanged through the available channels.

The successful return rate of 98.41% demonstrates public cooperation with the RBI's currency management policy and the effectiveness of the multiple return mechanisms established by the central bank.