The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (All India Financial Institutions – Transfer and Distribution of Credit Risk) Directions, 2025.
The following has been stated namely: -
• The Directions aim to establish a uniform framework for managing credit risk among All India Financial Institutions (AIFIs). It states that the draft lays down prudential norms for credit risk transfer (CRT) through instruments such as loan participations, credit default swaps, and securitisation.
• It also specifies eligibility criteria for exposures, minimum retention requirements, and due diligence responsibilities of AIFIs.
• Further, it introduces standards for recognition, valuation, and capital treatment of credit risk transfer transactions, aligning them with Basel norms and RBI’s existing prudential regulations.
• It emphasizes the need for robust internal policies, board oversight, and transparency in risk distribution to safeguard financial stability and prevent regulatory arbitrage.
• This shall come into force from November 28, 2025.
[Notification no. - RBI/DOR/ 2025-26/327 DOR.STR.REC.246/21.04.048/2025-26]
