The Reserve Bank of India (RBI), on November 28, 2025, issued the Reserve Bank of India (Commercial Banks – Resource Raising Norms) Directions, 2025 to regulate the issuance of long-term bonds by commercial banks for financing infrastructure and affordable housing. These Directions apply to all commercial banks except SFBs, LABs, PBs and RRBs and permit issuance of long-term bonds (minimum seven-year maturity) specifically for lending to infrastructure sub-sectors and affordable housing as defined in the Harmonized Master List issued by the Ministry of Finance.
These Directions lay down the essential features of eligible long-term bonds, including mandatory denomination in INR, unsecured and redeemable structure, minimum seven-year tenor, issuance through public or private placement with SEBI-compliant ratings and listing, and prohibition on embedded options. The bonds may carry fixed or floating interest rates, are not eligible for deposit insurance, and must comply with all applicable statutory and regulatory requirements. Regulatory incentives are offered: exemptions from CRR/SLR computation (to the extent of Eligible Credit) and exclusion from ANBC for PSL calculations, subject to strict alignment between bond issuance and incremental long-term infrastructure/affordable housing credit.
These Directions also prescribe safeguards on cross-holding of such bonds by banks to prevent double-counting of regulatory benefits—capping per-issue and aggregate exposures, disallowing HTM classification, restricting allotment to banks, and prohibiting banks from holding their own issuances. The Directions repeal earlier instructions to the extent inconsistent and ensure that long-term bond issuance remains aligned with financial-sector policy objectives.
[Notification No. RBI/DoR/2025-26/152]
