RBI Updates Master Direction on NRI Debt Investments
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2026-27/10 · issued 10 Apr 2026 · ~1 min read
Quick answerRBI has consolidated and updated the Master Direction on non-resident investment in debt instruments, covering NRI investments and collateral rules. AD Category-I banks must circulate this to customers. No new policy changes; it's a compilation of existing instructions.
What changed
RBI issued A.P. (DIR Series) Circular No. 06 on April 10, 2026, enclosing an updated Master Direction on non-resident investment in debt instruments. This consolidates previous instructions on NRI debt investments and using such debt as collateral for exchange-traded derivatives. No new regulatory changes were introduced; it's a compilation exercise.
What it means for you
For banks, this circular simplifies compliance by bringing all related instructions into one Master Direction, reducing the need to track multiple circulars. Lenders must ensure their systems and customer advisories align with the updated consolidated document. No immediate operational changes are required, but banks should verify they are referencing the latest version.
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 the updated Master Direction enclosed with the circular and update internal compliance manuals.
Notify all relevant departments (e.g., forex, NRI services, derivatives) about the consolidation.
Advise NRI customers and constituents about the updated framework for debt investments and collateral usage.
Ensure any references to older circulars on NRI debt investments are replaced with the new Master Direction.
Who it affects
AD Category-I banks, NRI customers investing in Indian debt instruments, Compliance and forex departments of banks
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-17 15:22 IST
Status change: superseded06 Jul 2026, 01:18 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Does this circular introduce any new rules for NRI debt investments?
No, this circular merely consolidates existing instructions into one updated Master Direction. No new policy changes have been introduced.
What should AD Category-I banks do with this circular?
Banks must bring the contents to the notice of their constituents and customers, and ensure they use the updated Master Direction for compliance.
Which regulations are referenced in this circular?
The circular references FEMA 396 (Debt Instruments Regulations, 2019) and the Master Direction dated January 7, 2025, as amended.
📜 Read the original circular — full text as issued by RBI
RBI/2026-27/10
A.P. (DIR Series) Circular No. 06
April 10, 2026
To
All Authorised Dealer Category-I banks
Madam / Sir,
Master Direction - Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025 – amendment
Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to the Foreign Exchange Management (Debt Instruments) Regulations, 2019 notified, vide Notification No. FEMA. 396/2019-RB dated October 17, 2019 (hereinafter “FEMA 396”) and the Master Direction - Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025 dated January 07, 2025 (hereinafter “Master Direction”), as amended from time to time.
2. Over the years, the Reserve Bank has issued directions relating to, inter alia, investments in debt instruments by Non-Resident Indians (NRIs) and offering of debt instruments acquired in terms of FEMA 396 as collateral to recognized Stock Exchanges in India for transactions in exchange traded derivative contracts. These instructions have now been consolidated in the aforesaid Master Direction.
3. The updated Master Direction is enclosed .
4. AD Category–I banks may bring the contents of this circular to the notice of their constituents and customers concerned.
5. The Directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approval, if any, required under any other law.
Yours faithfully,
(Dimple Bhandia)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2026-27/10 · issued 10 Apr 2026. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 02 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=13369&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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