RBI master-direction RBI/DOR/2025-26/354 · 28 Nov 2025
Official title
Reserve Bank of India (Non-Banking Financial Companies – Classification, Valuation and Operation of Investment Portfolio) Directions, 2025 (Updated as on July 01, 2026)
Summary
Check the official recordThese Directions establish the framework for the classification, valuation, and operation of investment portfolios for Non-Banking Financial Companies (NBFCs). The rules apply to various NBFC categories, including NBFC-D, NBFC-ICC, NBFC-Factor, NBFC-MFI, NBFC-IFC, IDF-NBFC, HFC, and CICs. NBFCs must implement a Board-approved investment policy and classify investments according to accounting standards. The Directions mandate specific valuation methods for current and long-term investments, govern transactions in Government Securities, and require reporting of corporate bond trades. Additional regulations apply to NBFCs in the Middle and Upper Layers regarding repo transactions, currency options, and interest rate futures. These Directions supersede previous instructions on investment portfolio management. NBFCs must ensure compliance with these requirements effective from the date of issue.
What you must do
Key dates
Who is affected
Exceptions
If you do not comply
RBI/DOR/2025-26/354 DOR.MRG.REC.No.273/00-00-014/2025-26 November 28, 2025 Previous Versions Reserve Bank of India (Non-Banking Financial Companies – Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025 (Updated as on July 01, 2026)
Table of Contents Chapter I: Preliminary A. Short Title and Commencement B. Applicability C. Definitions Chapter II: Regulations applicable for NBFC-BL A. Accounting B. Investment Policy C. Transactions in Government Securities D. Operative instructions relating to Government Securities Transactions E. Reporting Platform for Corporate Bond Transactions F. Accounting for Investments for non-Ind AS NBFC G. Income from Investments H. Investments in Alternative Investment Funds (AIFs) I. Currency Futures J. Interest Rate Futures Chapter III: Regulations applicable for NBFC-ML and NBFC-UL A. Ready Forward Contracts in Corporate Debt Securities B. Participation in Currency Options C. Participation in Interest Rate Futures Chapter IV: Repeal and Other Provisions A. Repeal and Saving B. Application of other laws not barred C. Interpretations
In exercise of the powers conferred by Sections 45JA, 45K, 45L, and 45M of the Reserve Bank of India Act, 1934, Sections 30, 30A, 32, and 33 of the National Housing Bank Act, 1987, Section 3 read with Section 31A and Section 6 of the Factoring Regulation Act, 2011, and all other provisions / laws enabling the Reserve Bank of India (‘RBI’) in this regard, the RBI being satisfied that it is necessary and expedient in the public interest so to do, hereby issues the Directions hereinafter specified.
These Directions shall be called the Reserve Bank of India (Non-Banking Financial Companies – Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025.
These Directions shall come into effect from the date of issue.
i. NBFC-D registered with the RBI under the provisions of the RBI Act, 1934;
ii. NBFC-ICC registered with the RBI under the provisions of the RBI Act, 1934;
iii. NBFC-Factor registered with the RBI under the provisions of the Factoring Regulation Act, 2011;
iv. NBFC-MFI registered with the RBI under the provisions of the RBI Act, 1934;
v. NBFC-IFC registered with the RBI under the provisions of the RBI Act, 1934;
vi. IDF-NBFC registered with the RBI under the provisions of the RBI Act, 1934;
vii. HFC registered with the RBI under the provisions of the NHB Act, 1987; and
viii. CICs registered with the RBI under the provisions of the RBI Act, 1934.
(2) NBFCs classified under the Base Layer (NBFCs-BL) shall be required to comply with the provisions of Chapter II, NBFCs in the Middle Layer (NBFCs-ML), and NBFCs placed in the Upper Layer (NBFCs-UL) shall comply with Chapters II and III.
(3) These Directions are not applicable for the following Non-Banking Financial Companies:
i. MGC registered with RBI under the scheme of Registration of Mortgage Guarantee Companies;
ii. NBFC-P2P registered with the RBI under the provisions of the RBI Act, 1934;
iii. NBFC-AA registered with the RBI under the provisions of the RBI Act, 1934;
iv. SPD registered with the RBI as NBFCs under the provisions of the RBI Act, 1934;
v. NOFHC registered with the RBI as NBFC under the provisions of the RBI Act, 1934;
vi. 1[NBFC holding Certificate of Registration as ‘Type I NBFC’]; and
vii. ‘NBFCs in Base layer having customer interface but not availing public funds’.
Provided that paragraphs 11 to 13, and paragraphs 28 to 29, shall be applicable to 2[NBFC holding Certificate of Registration as ‘Type I NBFC’], and ‘NBFCs-BL having customer interface but not availing public funds’.
Note: The applicability under these Directions is in line with the regulatory structure for NBFCs as set out in Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025.
(1) ’Carrying Cost’ means book value of the assets and interest accrued thereon but not received.
(2) ’Current Investment’ means an investment which is by its nature readily realisable and is intended to be held for not more than one year from the date on which such investment is made.
(3) Long Term Investment’ means an investment other than a current investment.
(4) ‘Priority distribution model’ shall have the same meaning as specified in the SEBI circular SEBI/HO/AFD-1/PoD/P/CIR/2022/157 dated November 23, 2022.
The Board of Directors (Board) of an NBFC shall frame investment policy for the company and shall implement the same.
The criteria for classification of investments as per applicable accounting standards shall be spelt out by the Board of the company in the investment policy.
Investments in securities shall be classified as per the applicable accounting standards, at the time of making each investment.
For a non-Ind AS NBFC, in case of inter-class transfer:
(1) There shall be no such transfer on ad-hoc basis.
(2) Such transfer, if warranted, shall be affected only at the beginning of each half year, on April 1 or October 1, with the approval of the Board.
(3) The investments shall be transferred scrip-wise, from current to long term or vice-versa, at book value or market value, whichever is lower.
(4) The depreciation, if any, in each scrip shall be fully provided for and appreciation, if any, shall be ignored.
(5) The depreciation in one scrip shall not be set off against appreciation in another scrip, at the time of such inter-class transfer, even in respect of the scrips of the same category.
