NaBFID gets AIFI status for credit derivatives and repo markets
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2024-25/101 · issued 01 Jan 2025 · ~1 min read
Quick answerRBI has formally allowed NaBFID to participate as an All-India Financial Institution in credit default swap and repo transactions, updating the relevant Master Directions to include NaBFID. This takes effect immediately.
The rule, in the simplest words
NaBFID (a special bank for big infrastructure projects) is now officially allowed to do credit default swaps (a kind of insurance against a loan not being paid back) and repo transactions (short-term borrowing by selling something and buying it back later).
The RBI (India's central bank) changed its rule books to clearly list NaBFID as an eligible All-India Financial Institution (a type of big finance company that works across India).
This rule starts working right away, so NaBFID can start using these tools immediately.
How it plays out — a real example
A credit & lending officer in Indore, Priya, is checking her bank's list of approved counterparties for repo deals. She sees NaBFID is now officially listed as an AIFI, so she can confidently lend to NaBFID in a repo transaction, knowing the RBI has given the green light. This helps her bank manage short-term cash needs more easily.
What changed
RBI updated the Master Direction on Credit Derivatives (2022) and the Repo Directions (2018) to explicitly include NaBFID as an eligible AIFI. Previously, NaBFID's participation was implied but not formally listed in these Directions.
What it means for you
NaBFID can now legally undertake credit default swap and repo transactions under RBI's regulatory framework, expanding its toolkit for liquidity and risk management. For other market participants, this adds a new, well-capitalized counterparty in these markets, potentially deepening liquidity.
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
Update internal counterparty eligibility lists to include NaBFID for CDS and repo transactions.
Review credit and operational risk policies to account for NaBFID as a new AIFI counterparty.
Ensure compliance teams note the updated Master Directions for any transaction referencing NaBFID.
Who it affects
All eligible market participants in CDS and repo markets, NaBFID, Banks and financial institutions dealing with NaBFID
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-18 02:34 IST
Status change: superseded2026-07-13T04:47:15
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
When does this become effective?
The circular is applicable with immediate effect from the date of issuance, January 1, 2025.
📜 Read the original circular — full text as issued by RBI
This circular has been superseded by Master Direction – Reserve Bank of India (Credit Derivatives) Directions, 2022 and Master Direction – Reserve Bank of India (Repurchase Transactions (Repo)) Directions, 2025 .
RBI/2024-25/101
FMRD.DIRD.No.09/14.03.004/2024-25
January 01, 2025
To
All eligible market participants
Madam/Sir,
Participation of NaBFID as an AIFI in financial markets
Please refer to the press release dated March 09, 2022 wherein it was communicated that the National Bank for Financing Infrastructure and Development (NaBFID) shall be regulated and supervised as an All-India Financial Institution (AIFI) by the Reserve Bank under Sections 45L and 45N of the Reserve Bank of India Act, 1934 and the Master Direction - Reserve Bank of India (Prudential Regulations on Basel III Capital Framework, Exposure Norms, Significant Investments, Classification, Valuation and Operation of Investment Portfolio Norms and Resource Raising Norms for All India Financial Institutions) Directions, 2023 dated September 21, 2023 which specify that AIFIs can undertake credit default swap and repo transactions, in terms of Master Direction – Reserve Bank of India (Credit Derivatives) Directions, 2022 and the Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018 , as amended from time to time.
2. In this regard, the following Directions have been updated, as attached, to amply clarify that NaBFID is permitted to participate as an AIFI in financial markets regulated by the Reserve Bank:
Master Direction – Reserve Bank of India (Credit Derivatives) Directions, 2022 ; and
Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018 (Updated as on November 28, 2019) .
3. The Directions shall be applicable with immediate effect.
4. The Directions contained in this circular have been issued in exercise of the powers conferred under section 45W of the Reserve Bank of India Act, 1934 read with section 45U of the Act and of all the powers enabling it in this behalf.
Yours faithfully,
(Dimple Bhandia)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2024-25/101 · issued 01 Jan 2025. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
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=12761&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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