The Reserve Bank of India (RBI) on November 28, 2025, released the Reserve Bank of India (Small Finance Banks – Credit Facilities) Directions, 2025 for public comments. The Directions, issued under Sections 21 and 35A of the Banking Regulation Act, 1949, aim to consolidate and streamline the regulatory framework governing credit facilities extended by Small Finance Banks (SFBs). These Directions provide a unified code covering a wide range of credit operations, including project finance, gold and silver-backed lending, microfinance, infrastructure and real estate finance, acquisition finance, export credit, and non-fund-based credit facilities.
The framework prescribes comprehensive norms on governance, Board oversight, digital lending arrangements, and prudential requirements to ensure transparency, responsible conduct, and borrower protection. It lays down detailed provisions on digital lending through Lending Service Providers (LSPs) and Digital Lending Apps (DLAs), including rules for data protection, reporting, and loss-sharing arrangements. It also defines terms like Loan-to-Value (LTV) ratio, project finance parameters, and key prudential conditions related to sanction, disbursement, and monitoring of credit exposures.
Additionally, the Directions outline specific rules for lending against gold and silver, real estate and infrastructure financing, loans to NBFCs, export and import credit, guarantees, and other non-fund-based facilities. The framework seeks to promote innovation and credit flow while ensuring financial stability and depositor protection. Once finalized, these Directions will replace existing circulars and become the single reference framework for all credit-related activities of SFBs.
These Directions shall come into force with immediate effect.
[Notification No. RBI/DOR/2025-26/185 DOR.CRE.REC.No. /07-01-002/2025-26]
