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

Reserve Bank of India (Non-Banking Financial Companies - Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025

28-Nov-2025 | RBI/DOR/2025-26/354 DOR.MRG.REC.No.273/00-00-014/2025-26

RBI has issued Reserve Bank of India (Non-Banking Financial Companies - Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025, effective from 28th Nov 2025. Applicability -The Directions apply to NBFC-D, NBFC-ICC, NBFC-Factor, NBFC-MFI, NBFC-IFC, IDF-NBFC, Housing Finance Companies (HFCs) and Core Investment Companies (CICs). Key Highlights: 2. Accounting Requirements - Ind AS-compliant NBFCs must follow Ind AS and comply with RBI's Financial Statements Directions, 2025. - Non-Ind AS NBFCs must follow Accounting Standards notified under Companies (Accounting Standards) Rules, 2021. 3. Mandatory Investment Policy: - Every NBFC must adopt a Board-approved investment policy specifying classification criteria for investments, valuation principles and internal controls for investment operations. 4. Classification: - Investments must be classified as current or long-term based on intention and maturity (>1 year for current). 5. Government Securities & Corporate Bonds: - All Government securities transactions must be routed through gilt/demat accounts. - NBFCs must comply with RBI's 2004-2005 government securities transaction guidelines. - OTC trades in corporate bonds must be reported within 15 minutes on a recognised exchange (NSE/BSE/MCX). 6. Income Recognition: - Dividend from shares and mutual funds: recognised on cash basis, unless declared and payable. - Interest on bonds/debentures and government securities: recognised on an accrual basis, provided interest is serviced regularly. - Government-guaranteed securities: interest recognised on an accrual basis. For more information, kindly refer to the attached document.

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