IFC Infrastructure Bonds Exempted from Public Deposit Rules
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2010-11/242 · issued 22 Oct 2010 · ~1 min read
Quick answerRBI exempts long-term infrastructure bonds issued by Infrastructure Finance Companies (IFCs) under Section 80CCF of the Income Tax Act from being classified as 'public deposits', easing regulatory compliance for these NBFCs.
The rule, in the simplest words
IFCs can issue long‑term infrastructure bonds that are NOT counted as ‘public deposits’ (public deposits are funds that banks must keep under RBI limits).
The exemption applies only to bonds listed by the Central Government under Section 80CCF of the Income Tax Act, which gives a tax benefit for infrastructure projects.
RBI added a new sub‑clause (m) to the 1998 Directions, so these bonds no longer add to an IFC’s public deposit limit.
Because the bonds are exempt, IFCs can raise more money for infrastructure without increasing their regulatory burden, and banks that lend to or invest in IFCs may see better credit quality.
How it plays out — a real example
Sita, a senior relationship manager at a Mumbai bank, meets with an IFC client planning to issue a long‑term infrastructure bond. She explains that the bond is exempt from public deposit limits, so the IFC can raise the needed capital without raising its deposit ratio, making the project more affordable for the client.
What changed
RBI amended the Non-Banking Financial Companies Acceptance of Public Deposits Directions, 1998, by inserting a new sub-clause (m) under paragraph 2(1)(xii). This exempts amounts raised by IFCs through infrastructure bonds specified by the Central Government under Section 80CCF from the definition of 'public deposit'.
What it means for you
IFCs can now raise long-term infrastructure bonds without these funds counting toward their public deposit limits, reducing compliance burden. This encourages IFCs to channel more capital into infrastructure projects, supporting the government's focus on infrastructure financing. Banks lending to or investing in IFCs may see improved credit quality as IFCs gain a cheaper, tax-advantaged funding source.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Review your IFC clients' funding mix to assess reliance on these exempt bonds.
Update internal classification of IFC deposits to exclude Section 80CCF bonds from public deposit calculations.
Advise IFC clients on the regulatory benefits of issuing these bonds for infrastructure funding.
Monitor Central Government notifications for updates on eligible bonds under Section 80CCF.
Who it affects
Infrastructure Finance Companies (IFCs), Banks lending to or investing in IFCs, NBFCs classified as IFCs by RBI, Investors in long-term infrastructure bonds
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-19 04:00 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is the key change in this circular?
RBI exempts amounts raised by IFCs through long-term infrastructure bonds under Section 80CCF from being treated as public deposits, amending the 1998 Directions.
Which entities are eligible for this exemption?
Only NBFCs classified as Infrastructure Finance Companies by RBI, as specified in Central Government notifications under Section 80CCF, are eligible.
Does this affect existing public deposit limits for IFCs?
Yes, these bonds no longer count toward public deposit ceilings, giving IFCs more headroom to raise funds without triggering additional regulatory requirements.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #135: Notification No. DNBS.(PD).216/CGM(US)-2010 — "Notification on Long Term Infrastructure Finance Bonds issued by Infrastructure Finance Companies (IFCs) under S”
📜 Read the original circular — full text as issued by RBI
RBI/2010-11/242
DNBS (PD) CC.No.203/03.10.001/2010-2011
October 22, 2010
All Infrastructure Finance Companies
Dear Sir
Long Term Infrastructure Finance Bonds issued by Infrastructure Finance Companies (IFCs) under Section 80CCF of the Income Tax Act, 1961- Exemption from the definition of “public deposit”
It may be recalled that the Central Government, vide Notification No.48/2010/F.No.149/84/2010-SO (TPL) dated July 09, 2010, has specified certain bonds as long term infrastructure bonds for the purposes of Section 80CCF of Income Tax Act, 1961 viz, bonds issued by Industrial Finance Corporation of India, Life Insurance Corporation, Infrastructure Development Finance Company and a Non-Banking Finance Company classified as an Infrastructure Finance Company by the Reserve Bank of India.
2. It is accordingly advised that amount raised by issue of infrastructure bonds by Infrastructure Finance Companies, as specified in the notification issued from time to time by the Central Government under Section 80CCF of the Income Tax Act, 1961, shall not be treated as ‘public deposit’ within the meaning of paragraph 2(1) (xii) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998.
3. Notification issued in this regard, DNBS (PD) Notification No.216(US)/2010 dated October 22, 2010, amending the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998, is enclosed .
Yours faithfully
(Uma Subramaniam)
Chief General Manager-In-Charge
RESERVE BANK OF INDIA
DEPARTMENT OF NON-BANKING SUPERVISION
CENTRAL OFFICE
CENTRE I, WORLD TRADE CENTRE,
CUFFE PARADE, COLABA,
MUMBAI 400 005.
Notification No. DNBS.(PD) 216/CGM(US)-2010 dated October 22 , 2010
The Reserve Bank of India, having considered it necessary in public interest and being satisfied that, for the purpose of enabling the Bank to regulate the credit system to the advantage of the country, it is necessary to amend the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998, contained in Notification No.DFC.118/DG (SPT)/98 dated January 31, 1998, in exercise of the powers conferred by sections 45J, 45K, 45L and 45-MA of the Reserve Bank of India Act, 1934 (2 of 1934) and of all the powers enabling it in this behalf, hereby directs that the said directions shall be amended with immediate effect as follows-
Amendment of paragraph 2-
In clause (xii) of sub-paragraph (1), after sub-clause (l), the following sub-clause (m) shall be inserted –
“(m) any amount raised by the issue of infrastructure bonds by an Infrastructure Finance Company, as specified in the notification issued from time to time by the Central Government under section 80CCF of the Income Tax Act, 1961.”
(Uma Subramaniam)
Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/242 · issued 22 Oct 2010. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6054&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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