The Reserve Bank of India has amended its 2025 credit facilities directions for All India Financial Institutions (AIFIs) by introducing a new framework for lending to Infrastructure Investment Trusts (InvITs). The changes permit AIFIs to lend to Securities and Exchange Board of India (SEBI) regulated listed InvITs and set detailed conditions on underwriting, refinancing, leverage, repayment structures, security, and acquisition finance. AIFIs must adopt board-approved policies covering appraisal, sanction, underwriting metrics such as debt service coverage ratio, exposure limits, and monitoring. Lending is limited to listed InvITs, with at least 80 per cent of asset value invested in completed, revenue-generating infrastructure projects that have generated positive operating cash flows for at least one year. AIFIs must ensure the legal structure does not impair borrowing eligibility or enforcement of lender rights, monitor end use of funds, and avoid using InvIT lending to support stressed special purpose vehicles. If financing is used to refinance special purpose vehicle debt, it can only cover completed projects that have commenced commercial operations. The directions also prohibit bullet or ballooning repayment structures for loan exposures, while allowing cash flow aligned amortisation, and exempt bond, debenture, and commercial paper investments from that restriction. For acquisition finance, AIFIs may finance an InvIT acquiring control of a non-financial infrastructure company as a strategic investment, subject to a standalone and consolidated minimum net worth of INR 500 crore for the acquiring company, a lender financing cap of 75 per cent of acquisition value, pro forma consolidated credit assessment, security over the acquired instruments, and completion of interconnected control transactions within 12 months of first disbursal. The amended directions take effect from October 1, 2026, unless an AIFI adopts them earlier in full. Existing InvIT loans that do not conform may run off until maturity, but AIFIs cannot renew, review, or enhance those facilities unless they comply with the new requirements.
Reserve Bank of India2026-06-10
Reserve Bank of India allows all India financial institutions to lend to listed InvITs under new acquisition finance and prudential rules
The Reserve Bank of India has amended its 2025 credit facilities directions for All India Financial Institutions by introducing a framework for lending to SEBI-regulated listed Infrastructure Investment Trusts. It sets conditions on eligibility, underwriting metrics, leverage, repayment structures, security, refinancing and acquisition finance, and restricts support for stressed special purpose vehicles. Existing non-compliant InvIT exposures may run off to maturity, but AIFIs may not renew or enhance such facilities unless they meet the new requirements.