Reserve Bank of India (Small Finance Banks - Resource Raising Norms) Directions, 2025
UR
- Applies toSmall finance banks
- StatusIn force
- IssuedNov 28, 2025
- Amendmentsnone tracked
- Length27 points in 4 sections · 3 min read
The four dates on this rule
- PublishedNov 28, 2025The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applyNov 28, 2025The day this rule starts to apply, as RBI's own text states it.
- Time to get readyNoneIt starts to apply on the day it was published.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
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Numbers to remember
| seven years | A bank may issue these bonds only with a minimum maturity of seven years. RBI Para 4 |
| two per cent | One bank's stake in another's such bonds is capped at two per cent of its own Tier 1 Capital. RBI Para 7 |
| 10 per cent | Total holdings in such bonds are capped at 10 per cent of Non-SLR investments. RBI Para 7 |
| 20 per cent | No single bank may take more than 20 per cent of one bond issue. RBI Para 7 |
What it says
How firm is each point
Stated by RBI — RBI’s own paragraph says this. We have only made it plainer.
Our reading — BankPulse read RBI’s paragraph and shortened it. The paragraph is the authority, not this line.
Needs judgement — RBI leaves this to the bank to settle, so nobody can give you a fixed number here.
Chapter I. Preliminary
1. Starts once posted online
The rules start the day RBI puts them on its own website.
2. Covers Small Finance Banks
These rules cover Small Finance Banks only.
Chapter II. Issue of Long-Term Bonds for Financing Infrastructure Sub-Sectors
Must know
1. Bonds need seven-year minimum
A bank may issue these bonds only with a minimum maturity of seven years.
2. Money funds infrastructure projects
The bonds may fund lending to long term infrastructure projects.
3. Or affordable housing loans
The bonds may also fund individual affordable housing loans.
4. No cap on bond quantity
A bank may issue any number of these bonds.
5. Incentives need incremental financing
The incentives apply only to bonds financing new infrastructure projects.
6. Bought loans need RBI approval
Buying such loans from another bank needs RBI's prior approval to count.
7. Interest, fixed or floating
A bond's interest rate under this rule may be fixed or floating.
8. Not eligible for deposit insurance
These bonds carry no deposit insurance cover.
9. Eligible Credit needs seven years
Eligible Credit means loans with an original maturity beyond seven years.
10. Exempt from CRR and SLR
Eligible bonds are exempt from the usual CRR and SLR requirements.
11. Also exempt from PSL calculation
Eligible bonds are also exempt from priority-sector lending calculations.
12. Not counted as banking-system assets
Such holdings do not count as assets with the banking system.
13. Not held under HTM category
Such holdings may not be booked under the HTM category.
14. Cross-holding, two per cent cap
One bank's stake in another's such bonds is capped at two per cent of its own Tier 1 Capital.
BankPulse example. A bank's Tier 1 Capital is Rs 500 crore. Its stake in one issue of these bonds may not cross Rs 10 crore, two per cent of that.
15. Aggregate cap, 10 per cent
Total holdings in such bonds are capped at 10 per cent of Non-SLR investments.
16. 20 per cent, one issue
No single bank may take more than 20 per cent of one bond issue.
17. Cannot hold its own bonds
A bank cannot invest in its own bonds under this rule.
Do it
18. Bonds unsecured and redeemable
A bond issued under this rule must be fully paid, redeemable and unsecured.
19. Issued only in rupees
A bond under this rule may be issued only in Indian Rupees.
20. No call or put options
A bond under this rule may carry no embedded call or put option.
21. Public issue or private placement
A bond may be issued by public issue or private placement.
22. Report the bond issue promptly
A bank must report a bond issue to RBI right after completion.
Chapter III. Repeal and Other Provisions
1. Old resource-raising rules gone
All earlier resource-raising rules for these banks now stand repealed.
2. Past actions still stand
Anything done under the old rules stays governed by those old rules.
3. This adds to other law
These rules add to other laws, and take nothing away from them.
The same subject for other kinds of institution
The same subject for other kinds of institution.
Other RBI rules for small finance banks
RBI compliance officer and compliance function rules for small finance banks 2026
RBI credit bureau reporting rules for small finance banks 2025
RBI credit card and debit card rules for small finance banks 2025
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