Executive Summary

RBI, through RBI/2026-27/237 dated 25 August 2026, issued the Reserve Bank of India (Non-Banking Financial Companies – Concentration Risk Management) Fourth Amendment Directions, 2026, extending the large exposure limits applicable to NBFC-IFCs to eligible IDF-NBFCs classified in the Upper Layer.

Background

RBI's Concentration Risk Management Directions, 2025 prescribe exposure-concentration norms for NBFCs. The August 2026 amendment addresses the specific position of Infrastructure Debt Fund-NBFCs (IDF-NBFCs) that fall within the Upper Layer under RBI's scale-based regulatory framework.

What Has Changed?

A new paragraph 39A has been inserted in Chapter IV of the Directions, providing that the large exposure limits applicable to NBFC-IFCs shall also apply to IDF-NBFCs subject to Upper Layer regulation.

Key Provisions

• NBFC-IFC large exposure limits now extend to eligible Upper Layer IDF-NBFCs.
• Issued under the RBI Act, 1934.
• Comes into force with immediate effect.

Applicability / Who Are Affected

• IDF-NBFCs, particularly those classified in the Upper Layer;
• NBFC-IFCs, for reference purposes on the applicable exposure framework; and
• Risk, finance and compliance teams of affected NBFCs.

Practical Implication

Affected IDF-NBFCs must reassess exposure monitoring against the applicable large exposure limits, including recalculating concentration levels for existing exposures.

What Businesses Should Do

1. Determine Upper Layer classification status.
2. Identify exposures now subject to the revised limits.
3. Recalculate and review concentration levels.
4. Update internal risk and regulatory reporting systems.

KGS Perspective

Exposure classification and concentration-limit testing become key audit areas here. Audit teams should verify management's calculations against the amended framework and review controls around identifying and monitoring large exposures.

Conclusion

The amendment narrowly, but immediately, brings eligible Upper Layer IDF-NBFCs within the NBFC-IFC large exposure limits. Affected entities should review exposure monitoring with immediate effect.

Source / Regulatory Reference

• RBI – NBFC Concentration Risk Management Fourth Amendment Directions, 2026: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13679&Mode=0