The Reserve Bank of India (RBI) on November 28, 2025 issued the Reserve Bank of India (Small Finance Banks – Resource Raising Norms) Directions, 2025, providing a framework for Small Finance Banks (SFBs) to issue long-term bonds for financing infrastructure and affordable housing. The Directions permit SFBs to raise resources through unsecured, fully paid, plain-vanilla rupee-denominated bonds with a minimum maturity of seven years, aligning such issuances with the Harmonized Master List of Infrastructure Sub-sectors. They include detailed conditions on instrument structure, maturity, interest rate type, listing, credit rating, and compliance requirements.
The Directions also specify regulatory incentives: eligible long-term bonds are exempted from CRR/SLR computation (to the extent of Eligible Credit), and qualified issuances receive relaxation in ANBC computation for priority sector lending obligations. They further detail computation of DTL after adjusting for long-term bonds, eligibility conditions for affordable housing/infrastructure loans, and rules governing cross-holdings to avoid double counting of regulatory benefits.
These norms aim to strengthen long-term funding avenues for SFBs, promote credit flow to infrastructure and affordable housing, and ensure regulatory consistency with broader prudential frameworks, while aligning issuance and reporting requirements with SEBI and RBI standards. [Notification No. RBI/DOR/2025-26/183]
