RBI proposes new infrastructure risk weights for NBFCs

MUMBAI: India’s central bank on Friday proposed revised risk-weight guidelines for non-banking financial companies’ infrastructure loans, a move that could lower capital requirements for lenders financing established projects.

The Reserve Bank of India issued draft rules that would apply lower risk weights to infrastructure exposures based on project performance and loan repayment history, aligning capital charges more closely with actual credit risk.

Under the proposal, NBFCs would apply a 75% risk weight to performing infrastructure loans where projects have completed at least one year of commercial operations and borrowers have repaid 5-10% of the sanctioned amount.

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High-quality projects with repayments of at least 10% would qualify for a 50% risk weight, potentially freeing up capital for additional lending.

The central bank invited public comments on the draft circular, which is scheduled to take effect from April 1, 2026.