Circular No. DOR.CRE.REC.450, Dated: 30.03.2026
The Reserve Bank of India (RBI) has issued revised Undertaking of Financial Services Directions for commercial banks, updating the regulatory framework governing specific credit and financing activities.
1. Alignment with Credit Facilities Amendment Directions, 2026
The revisions have been introduced pursuant to the Credit Facilities Amendment Directions, 2026, ensuring that the Undertaking of Financial Services framework is aligned with the updated regulatory approach to credit exposures.
2. Inclusion of Acquisition and Bridge Finance
The Directions have been modified to explicitly include:
- Acquisition finance
- Bridge finance
These are now permitted for financing promoters’ stake in new companies, thereby providing greater clarity and flexibility in structuring such transactions.
3. Lending to Individuals Against Eligible Securities
The revised framework also recognises and permits lending to individuals against eligible securities, subject to applicable prudential norms and safeguards.
This expands the scope of permissible credit facilities under the Directions.
4. Strengthening Regulatory Clarity and Consistency
By incorporating these changes, the RBI aims to:
- Ensure consistency across related regulatory frameworks
- Provide clear guidance on permissible financing structures
- Enhance prudential oversight of capital market-linked exposures
5. Conclusion
The revised Directions streamline and modernise the regulatory framework, aligning it with recent amendments and enabling banks to undertake structured financing activities within a well-defined and risk-sensitive regime.
Click Here To Read The Full Circular
The post RBI Amends Financial Services Norms for Banks appeared first on Taxmann Blog.
