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

Reserve Bank of India (Non-Banking Financial Companies - Concentration Risk Management) Directions, 2025

28-Nov-2025 | RBI/DOR/2025-26/351 DOR.CRE.REC.270/07-03-008/2025-26

RBI has issued Reserve Bank of India (Non-Banking Financial Companies - Concentration Risk Management) Directions, 2025, effective from 28th Nov 2025. Applicability: These Directions shall be applicable to all NBFC-D, NBFC-ICC, NBFC-Factor, NBFC-MFI, NBFC-IFC, IDF-NBFC; selected provisions also apply to HFCs, Mortgage Guarantee Companies (Upper Layer), and SPDs. Key Highlights: - NBFC-BL Requirements: Must have a Board-approved concentration risk policy covering, Single-party and group exposure limits and Consumer credit sub-limits, especially unsecured credit. - NBFC-ML Requirements: Mandatory internal limits for Sensitive Sector Exposure (SSE) for Capital market, Commercial real estate (with a sub-limit for land acquisition). a. Single-party exposure capped at 25% of Tier 1 Capital; group exposure 40%. Higher limits permitted for infrastructure exposure. b.Exposure computation must consider credit risk transfer instruments such as: Govt guarantees, State Govt guarantees, CGTMSE / CRGFTLIH / NCGTC guarantees, and Credit default swaps. - NBFC-IFC gets enhanced limits (30% single / 50% group). - NBFC-UL Requirements: Must frame detailed policies on Exceeding 20%/25% single counterparty limits (with approvals & documentation), Identification of connected counterparties and Exposure limits for key sectors and NBFC sector specifically.

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