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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

Reserve Bank of India (Non-Banking Financial Companies - Asset Liability Management) Directions, 2025

28-Nov-2025 | RBI/DoR/2025-26/355 DoR.LRG.REC.No.274/13-10-004/2025-26

RBI has issued Reserve Bank of India (Non-Banking Financial Companies - Asset Liability Management) Directions, 2025, effective from 28th Nov, 2025. Key Highlights: 1. NBFC Boards must implement a robust ALM policy, covering: - Liquidity risk management framework - Prudential limits and tolerance levels - Stress testing methodologies - Monitoring of structural and dynamic liquidity gaps. 2. NBFCs must classify all assets and liabilities into prescribed time buckets and monitor Structural Liquidity (long-term mismatches) and short-term dynamic liquidity gaps. 3. NBFCs are required to maintain sufficient liquidity buffers, establish mechanisms to identify, measure, and control liquidity risk, implement daily, monthly, and quarterly liquidity monitoring tools and conduct stress testing for institution-specific and market-wide shocks. 4. Every NBFC must put in place a Board-approved contingency funding plan designed to manage potential liquidity crises, identify funding sources during stress, provide actionable steps for crisis escalation and response and ensure business continuity and restore liquidity within acceptable timeframes. 5. NBFCs must measure and manage interest rate risk through gap analysis, stress testing and scenario-based assessments. 6. NBFCs must submit ALM returns to the RBI at prescribed intervals, including structural liquidity statements, interest rate sensitivity reports and stress test results. For more information, kindly refer to the attached document.

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