SEBI has issued a Consultation Paper on 05.02.2026 proposing amendments to the InvIT Regulations related to end-use of borrowings, status of SPVs and investment in under-construction projects. Further, it has also proposed to enhance the investible options for both REITs and InvITs w.r.t liquid mutual funds.
InvITs and REITs have continued on a strong upward growth trajectory. As of November 2025, the aggregate AUM of 27 InvITs stood at approximately ₹7,00,000 Crores after growing at a CAGR of approx 18% per annum since FY 21. The assets spann nine infrastructure sectors including roads, telecom, and power, as well as emerging asset classes such as warehouses and educational infrastructure. Reflecting their expanding scale and leverage capacity, aggregate borrowings of InvITs have crossed ₹2,03,000 Crores1. In contrast, REITs continue to trail InvITs in terms of scale, with the combined AUM of the five listed REITs amounting to approximately ₹2,35,000 Crores during the same period.2 May refer to our article “Roads to Riches: A Snapshot of InvITs in India”.
SEBI has consistently sought to create a more enabling regulatory environment for these vehicles. A notable example is the classification of REIT units as equity for mutual funds (as discussed below), which sought to enhance institutional participation and liquidity. Complementing these regulatory efforts, the Union Budget 2026 introduced several targeted measures to deepen infrastructure financing, including the proposed Partial Credit Enhancement (PCE) framework and the creation of a dedicated infrastructure fund (see our write-up on the Budget 2026 here). Lastly, RBI in its Statement on Developmental and Regulatory Policies also allowed Banks to lend to REITs, putting them on same footing as InvITs (see our write-up on RBI’s Statement here). Taken together, these developments indicate that the growth trajectory of InvITs and REITs is expected to remain firmly positive.
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Budget 2026 proposed to introduce Total Return Swaps (TRS) for corporate bonds, purportedly as a measure for synthetic trading in corporate bonds. However, given the very slow pick up of credit default swaps, the much easier and globally prevalent version of credit derivatives, will the more esoteric TRS really make a difference? We explain what TRS is, how it differs from a CDS, give a sense of the global data on TRS as a part of OTC credit derivatives, and discuss how much the new measure will impact India’s bond market.
India’s credit derivatives market has historically remained shallow, with hardly any transanctions involving credit default swaps. This has resulted in limited hedging options focused only on default risk and an absence of tools for transferring market and price risk.
This contrasts sharply with global trends. As of mid-2025, the notional outstanding volume of OTC derivatives exceeded USD 840 trillion, with credit derivatives, despite being smaller in absolute size than interest rate or FX derivatives, recording the fastest year-on-year growth at approximately 23%.
It may be noted that as of 1996, which is when credit derivatives had almost started emerging and gaining strength, TRS transactions were significant and took up almost 32% of the market share. However, the percentage of TRS dropped. Over time, CDSs overtook the position because CDSs are more definitive and limit the risks of the protection seller. In 2025, as per 118th edition of the OCC’s Quarterly Report on Bank Trading and Derivatives Activities based on call report information provided by all insured U.S. commercial banks and others, the TRSs had become a smaller segment representing 4.9 per cent of the credit derivative market.
Meaning of TRS
In simple terms, a TRS swap transfers the entire volatility of returns of a reference asset from one party to another. TRS is a kind of derivative contract wherein the protection buyer agrees to transfer, periodically and throughout the term of the contract, the actual returns from a reference asset to the protection seller (“floating returns”), and the latter, in return, agrees to transfer returns calculated at a certain spread over a base rate (“fixed returns”) Total returns include the coupons, appreciation, and depreciation in the price of the reference bond. On the other hand, the protection seller will pay a certain base rate, say, risk free rate, plus a certain spread. The protection seller in the case of a TROR swap is also referred to as the total return receiver, and the protection buyer is similarly called the total return payer. The figure below illustrates the essential mechanics of a total return swap.
Impact of TRS TRS swaps originate from synthetic equity structures, where economic returns of an asset are transferred without any actual investment in the underlying. The structure separates economic exposure from legal ownership. In a TROR swap, the economic impact is such that the total return receiver assumes the position of a synthetic lender to or investor in the bonds of the reference obligor, while the total return payer becomes a synthetic lender to the counterparty. Consider the illustration below:
Party PB invests in the unsecured bonds of entity X carrying a fixed coupon of 9.5 per cent.
PB then enters into a TROR swap with PS, under which PB agrees to transfer the actual returns from the bonds of X and, in return, receive MIBOR plus 100 basis points.
Under the terms of the swap, PB periodically transfers the coupon income, plus any market price appreciation minus any market price r depreciation in the bonds, while PS periodically pays MIBOR plus 100 basis points.
Although PB technically holds the bonds of X, in substance PB has neither exposure to X nor to the returns generated by X. Instead, PB is economically exposed to PS at MIBOR plus 100 basis points, which is equivalent to having invested in PS at that rate.
Conversely, PS, despite not holding the bonds of X, is economically exposed to the actual returns from X’s bonds (net of MIBOR plus 100 basis points). The effect of the TROR swap is therefore to synthetically create a fully refinanced investment in the bonds of X, giving a return equal to the actual returns in the bonds, and having a funding cost equal to MIBOR plus 100 basis points.
Thus, the true impact of a TROR swap is the synthetic replacement of exposures. Consequently, the advantages of a TRS can be:
Off-balance sheet exposure: TRS creates synthetic assets without recording loans or bonds on balance sheets improving leverage ratios and capital efficiency.
Regulatory Arbitrage: TRS has been used to bypass investment or lending restrictions, such as exposure norms, concentration limits, etc.
Provides very high leverage: In the above illustration, the synthetic investment made by the O in the bond is highly leveraged, assuming no margin has been put by the PS.
Alternative to a Repo: Assume PB holds a bond and is looking at having it funded. It sells the bond to Q and simultaneously enters into a TRS transaction, paying MIBOR + spread and receiving the actual returns of the bond. Hence, PB continues to have an economic stake in the bond whereas for accounting purposes, the bond may be removed from the balance sheet of PB.
TRS structures have been used globally across a wide range of asset classes, including equities, bonds, loans, real estate and property interests, credit-linked notes, and portfolios or indices of such assets. Hence, a TRS is a credit derivative only when the reference asset is a credit asset, otherwise it is a generic total return derivative. The Draft CD Direction framework deliberately confines TRS usage to specified debt instruments in order to prevent synthetic funding and balance-sheet arbitrage.
CDS Vs TRS
Aspects
CDS
TRS
Basic Definition
A credit derivative contract where a protection seller commits to pay the buyer in the event of a credit event.
A credit derivative contract where a payer transfers the entire economic performance of an asset to a receiver (protection seller).
Risk Transferred
Transfers only the credit risk associated with a specific obligation. The protection seller is only concerned with the risk of default or increase in credit spreads of the asset. That is, the reference transaction only shifts the risk of credit spreads
Transfers the total volatility of returns, including credit risk, interest rate risk, and market risk. The receiver gains exposure to all gains and losses (coupons, appreciation, and depreciation).
Cash Flow Mechanics
The buyer makes periodic premium payments to the seller until maturity or a credit event
Involves a periodic exchange of cash flow, the payer gives returns and appreciation; the receiver gives a benchmark rate + spread and depreciation.
No fixed premium; the premium is inherent in the difference between actual returns and the agreed-upon spread
Synthetic Impact
Used primarily for credit insurance or hedging against specific default.
Used to synthetically replace the entire exposure of the parties, causing the receiver to assume the position of a synthetic lender to the reference obligation.
Types of TRS
Total Return Swaps can be categorized into several types based on their underlying assets and funding structures:
Index-Based TRS: Instead of a specific bond, the returns are linked to a diversified index (e.g., a broad-based index of 100 high-yield corporate bonds). The RBI specifically allows these if the index is composed of eligible debt instruments and published by an authorized administrator.
Equity Swaps: A type of TRS where the reference asset is one or more equity securities. Here, the total return payer pays the return from the equity or the portfolio, and in turn, receives a base rate spread.
Property Derivatives: The TRS methodology has been applied to swapping the returns of property investments also, allowing investors to synthetically invest in properties or property indices.
Structured TRS: Here, the reference assets would be a pool of loans or bonds. The transaction will make uses of the credit-linked notes.
The Draft CD Directions permit the use of TRS while adding multiple safeguards to ensure that TRS functions strictly as a credit risk transfer instrument and not as a means of synthetic funding, balance-sheet arbitrage, or regulatory circumvention. The regulatory framework governs four key aspects:
Eligible participants,
Permissible reference assets,
Permitted purposes for which these instruments may be used, and
Prudential safeguards.
Eligible participants for TRS
Para 4.1.2(iii) of the revised Directions stipulates that at least one counterparty to every credit derivative transaction must be a market-maker. For this purpose, market-makers are defined to include
Scheduled Commercial Banks,
Large NBFCs (including HFCs and SPDs) with a minimum net owned fund of ₹500 crore, and
Specified financial institutions such as NABARD, SIDBI, and EXIM Bank.
This requirement ensures that TRS transactions are intermediated by regulated entities with adequate risk management capabilities.
In alignment with this overarching requirement, the Draft CD Directions prescribe the following specific eligibility conditions for TRS:
TRS may be offered only by market-makers, ensuring that such transactions are undertaken by regulated entities with adequate risk management capabilities.
Residents (other than individuals) may enter into TRS without any restriction on the purpose, allowing both hedging and non-hedging purposes.
Persons resident outside India may enter into TRS only for the purpose of hedging, and such TRS may be offered to them exclusively by market-makers.
Reference entities and reference assets for TRS
In addition to prescribing eligible participants, the Draft CD Directions impose strict controls on the nature of reference entities and assets that may be used for TRS transactions. These controls are intended to ensure transparency, prevent regulatory arbitrage, and avoid the creation of complex or opaque synthetic exposures.
Reference entity:
A reference entity refers to the issuer whose credit risk and economic performance form the basis of the TRS contract. For TRS, the reference entity shall be a indian resident entity that is eligible to issue Reference assets under the Draft CD Directions.
By limiting reference entities to domestic issuers of eligible debt instruments, the framework ensures that TRS activity remains in the Indian corporate debt market, which was also the regulatory intent.
Reference assets:
A reference asset refers to the underlying corporate bond or debt instrument issued by the reference entity or an index of underlying debt instruments specified in a total return swap contract. The Draft CD Directions specify the following as eligible reference assets for TRS:
Money market debt instruments;
Rated INR-denominated corporate bonds and debentures;
Unrated INR-denominated corporate bonds and debentures issued by Special Purpose Vehicles (SPVs) set up by infrastructure companies; and
Bonds with call and/or put options.
At the same time, the Directions expressly prohibit TRS on certain instruments, including asset-backed securities, mortgage-backed securities, credit-enhanced or guaranteed bonds, convertible bonds, and other hybrid or structured obligations. This exclusion reflects regulatory caution against layering derivatives on complex or credit-enhanced products that could obscure risk transfer.
Index-based reference assets
The Draft CD Directions also permit a TRS to reference an index, provided that:
The index comprises only eligible debt instruments as specified above; and
The index is published by a financial benchmark administrator duly authorised by the RBI under the Reserve Bank of India (Financial Benchmark Administrators) Directions, 2023
Although such index based reference asset has been introduced for CDS and TRS, no such index for debt securities exists currently. Accordingly, such an index must be developed.
Preventing Regulatory circumvention:
Para 4.5.1(ii) of the Draft CD Directions expressly provides that market participants shall not undertake credit derivative transactions, including Total Return Swaps, involving reference entities, reference obligations, or reference assets where such transactions would result in exposures that the participant is not permitted to assume in the cash market, or where they would otherwise violate applicable regulatory restrictions. This provision prevents the use of TRS to bypass exposure limits, concentration norms, sectoral caps, or investment restrictions applicable to the participants.
Additional safeguards for TRS used for hedging
Where a TRS is entered into for the purpose of hedging, the market-maker is required to ensure that the user satisfies the following conditions:
The user has an existing exposure to the relevant reference asset
The notional amount of the TRS does not exceed the face value of the reference asset held by the user, and
The tenor of the TRS does not extend beyond:
The maturity of the reference asset held by the user, or
The standard TRS maturity date is immediately following the maturity of the reference asset.
These safeguards reinforce the principle that hedging-oriented TRS must remain strictly co-terminous and proportionate to the underlying exposure, thereby avoiding over-hedging or speculations. Further, the Draft CD Direction specify that the settlement rules and standard documentation will be specified by shall be specified by the Fixed Income Money Market and Derivatives Association of India (FIMMDA), in consultation with market participants. However, the market participants are allowed to, alternatively, use a standard master agreement for credit derivative contracts.
Will it impact the bond markets in India?
Will this new instrument have an impact on bond markets in India? The first instance of guidelines on credit derivatives was issued in 2011; this failed to have any impact at all. Then, after the report of the Working Group, new Credit Derivatives Directions were issued in 2022. These also, at least based on anecdotal market information, have not had any significant traction at all.
CDS is much more standardised than TRS; as we have noted above, TRS is only 4.9% of the global credit derivatives market. Will the Indian market, which has not yet picked up credit spread trading in the form of CDS, delve into a far more esoteric TRS trade? Was it based on any reasoned or surveyed market feedback that this regulatory change was inspired? These questions, a priori, are difficult to answer. However, like a new flavour of ice cream, you never know until you try it.
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Draft Income-tax Rules, 2026 (“Draft Rules”), intended to be applicable from 1st April, 2026, have increased the perquisite value for cars used for a mix of personal and official use, by Rs 3200 per month and Rs 4600 per month (where the expenses for running and maintenance are borne by the employer) and by Rs 1400 per month and Rs 2100 per month (where the expenses for running and maintenance are borne by the employee), respectively for upto 1.6 litre engine cars and above 1.6 litre engine cars. This, in our reading, will be applicable even for existing car lease transactions, increasing employees’ tax burden by Rs 5,040 to Rs 16,560 per car per annum. In addition, going forward, the tax attraction of CTC car leases comes down.
The Income Tax Department has issued the Draft Rules pursuant to the already-enacted rewrite of income tax law in form of Income Tax Act, 2025, replacing the 1961 Act. Accordingly, the 1962 Rules are to be replaced by Draft Rules, to apply from 1st April, 2026. The Draft Rules are mostly the same as the extant rules; however, monetary value of perquisites, covered by Rule 15 [corresponding to Rule 3(2) of existing Rules] is proposed to be enhanced significantly. Thus, there is a significant change in the valuation of perquisites relating to motor cars.
As per the Income-tax Act, the value of perquisites provided by an employer (such as the use of a motor car provided by the employer) is added to the employee’s taxable income under the head “Salaries”. The Draft Rules propose an increase in the perquisite value attributable to the use of a motor car.
The proposed increase in perquisite valuation would result in a higher taxable perquisite value in the hands of employees, thereby increasing their taxable income. The CTC-based car leasing model, which is a distinctive feature of the Indian tax framework and has been widely used for several decades, derives its attractiveness from the favourable rules governing the valuation of perquisites, which reduce the employee’s taxable income. Any upward revision in such perquisite valuation is therefore likely to reduce the tax benefits associated with this structure and may adversely impact the overall attractiveness of CTC-based car leasing arrangements.
CTC leasing of passenger cars alone is nearly Rs 9000 crores annual volume business in India, constituting roughly 1.5% of passenger vehicles sold in the country. If the Draft Rules are notified in their current form, the revised valuation norms will take effect from April 1, 2026 and will apply not only to new arrangements but also to all existing CTC car leasing arrangements. Based on a broad estimate, this change could result in an additional tax outflow of approximately ₹36 crores to ₹81 crores annually for employees under the existing CTC leasing arrangements.
This article explains the proposed changes and what they could mean for CTC-leasing going forward.
Taxability benefit under the CTC leasing structure
The tax benefit under the CTC car leasing structure arises from the differential treatment between
the lease rentals forming part of the employee’s CTC, and
the valuation of the perquisite in respect of the use of the motor car under the Income-tax Rules.
While the employer pays the lease rentals to the lessor as part of the employee’s CTC, the employee is not taxed on the actual lease rental amount. Instead, the employee is taxed only on the prescribed perquisite value of the car as determined under Rule 3(2) of the Income-tax Rules, 1962. This prescribed value is typically lower than the actual lease rentals, resulting in a reduction in the employee’s taxable income.
To illustrate: Assume an employee’s agreed CTC is ₹1,00,000 per month. The employer arranges a car on lease and pays lease rentals of ₹25,000 per month to the lessor, which forms part of the employee’s CTC. Accordingly, the employee’s cash salary reduces to ₹75,000 per month. For tax purposes, however, the employee is not taxed on the full ₹25,000. Instead, only the notional perquisite value of the car (as prescribed under Rule 3(2)) is added to his taxable income. The difference between the actual lease rentals and the lower perquisite valuation results in a tax arbitrage, which forms the economic rationale for the popularity of the CTC car leasing model.
Proposed Changes and Impact
The Draft Rules prescribe a higher perquisite value for the use of a motor car owned by an employer to be included in the taxable income of employees where it is used partly in the performance of duties and partly for private or personal purposes of the employees or their household members. The proposed revisions are summarised in the table below:
Expenses on maintenance and running met by
Cubic capacity of engine does not exceed 1.6 litres
Cubic capacity of engine exceeds 1.6 litres
Existing
Proposed
Existing
Proposed
Case I Employer
₹1,800 + ₹900*
₹5,000 + ₹3,000*
₹2,400 + ₹900*
₹7,000 + ₹3,000*
Case II Employee
₹600 + ₹900*
₹2,000 + ₹3,000*
₹900 + ₹900*
₹3,000 + ₹3,000*
*In case chauffeur is provided to run the motor car by the employer.
The proposed increase in the perquisite valuation of motor cars under the Draft Rules is likely to have a direct impact on the economics of the CTC car leasing model.
From the employee’s perspective, the proposed increase would result in a higher taxable perquisite being added to taxable income. The tax arbitrage that makes CTC car leasing attractive, i.e., the gap between the actual lease rentals and the lower notional perquisite value, is expected to narrow. As a result, the net tax savings available to employees under this model will be reduced. Below we have presented the likely impact with the help of two examples:
Example 1:
Lease rental: ₹25,000 per month
Engine capacity: 1.7 litres
Mixed use
Expenses on maintenance and running are met/ reimbursed by the employer
Tenure: 1 year
Particulars
Existing Rules
Draft Rules
Impact (Increase)
Annual CTC
₹12,00,000
₹12,00,000
–
Lease Rental (part of CTC)
₹3,00,000
₹3,00,000
–
Cash Salary Paid
₹9,00,000
₹9,00,000
–
Perquisite Value Taxable
₹28,800
₹84,000
₹55,200
Total Taxable Income
₹9,28,800
₹9,84,000
₹55,200
Tax @ 30% slab (excluding cess)
₹2,78,640
₹2,95,200
₹16,560
Example 2:
Lease rental: ₹25,000 per month
Engine capacity: 1.5 litres
Mixed use
Expenses on maintenance and running are met/ reimbursed by the employee
Tenure: 1 year
Particulars
Existing Rules
Draft Rules
Impact (Increase)
Annual CTC
₹12,00,000
₹12,00,000
–
Lease Rental (part of CTC)
₹3,00,000
₹3,00,000
–
Cash Salary Paid
₹9,00,000
₹9,00,000
–
Perquisite Value Taxable
₹7,200
₹24,000
₹16,800
Total Taxable Income
₹9,07,200
₹9,24,000
₹16,800
Tax @ 30% slab (excluding cess)
₹2,72,160
₹2,77,200
₹5,040
It shall be noted that employers would not incur any additional tax cost on account of the proposed changes, as the CTC paid to employees, including the lease rentals, would continue to be allowable as a deductible business expense.
Conclusion
The Draft Rules materially raise the perquisite valuation of employer-provided cars, pushing up the tax outflow for employees opting for CTC-based car leasing. Since the revised valuation (if notified) will apply even to existing leases from 1 April 2026, the tax efficiency of the CTC car lease model would stand materially reduced, impacting both the attractiveness and economics of such arrangements going forward.
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NFRA moved the needle, and it is to be seen if the ocean starts boiling.! A 7th Jan 2026 circular from NFRA, addressed to listed entities and their auditors, seemed like an attention-drawer to standards of auditing which are already there, and yet, the auditing fraternity is holding meetings with boards and senior management of listed entities, to comply with what was always a compliance requirement. Does the 7th Jan circular bring up any new boxes to be ticked, any new procedures to be laid or responsibilities to be reiterated? As we detail out in this article, there may be need for action on several fronts on the part of listed entities – identification of nodal persons, listing developments that need to be communicated, constituting team for responding to the findings of the auditors in course of their audit other than those that sit in the audit report, formation of sub-groups of TCWG, etc.
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Holding Companies whose primary intent is to invest in their group companies have lately faced a paradox with respect to the requirement of registration as a Core Investment Company (CIC).
CICs are entities whose principal activity is the acquisition and holding of investments in group companies, rather than engaging in external investments or lending exposure outside the group. Para 3 of the Reserve Bank of India (Core Investment Companies) Directions, 2025 (‘CIC Directions’) prescribes the quantitative thresholds for classification of an NBFC as a CIC. In terms thereof, an NBFC that holds not less than 90% of its net assets in the form of investments in group companies, of which at least 60% is in equity instruments, is classified as a CIC and is required to obtain registration from the RBI, unless exempted.
Conceptually, a CIC is a sub-category of a Non-Banking Financial Company (NBFC) (para 3 of the CIC Directions), just like Housing Finance Companies, Micro Finance Institutions, etc. The threshold criteria that NBFCs are required to satisfy is the principal business criteria (PBC), pursuant to which at least 50% of the total assets of the entity must consist of financial assets and at least 50% of its total income must be derived from such financial assets.
The PBC has historically served as the foundational threshold for determining whether an entity is an NBFC. Once the entity satisfies this principal requirement of carrying out financial activity, the sub-category is to be determined based on its line of business, which, lately, has seen quite a varietty – fron tradtional variants such as investment and lending activities (ICC), to housing finance (HFC), to financing of receivables (Factoring companies), the more recent inclusions are account aggregators (AA), mortgage guarantee companies (MGCs), infrastructure finance compaies (IFC), etc. Each of these NBFCs first, and then they fall in their respective class. For instance, HFCs are a type of NBFCs that primarily focus on extending housing loans and hence, must have a minimum housing loan portfolio of 60% and an individual housing loan of 50%.
Accordingly, all categories of NBFCs must first be ascertained to be carrying out financial activities as their primary business, and thereafter, the specific product helps to determine the category. Consequently, holding companies or CICs should ideally also adhere to the 50-50 criteria first and thereafter meet the 90-60 criteria for CIC classification.
However, there is a common perception among the market participants that CICs, irrespective of meeting such PBC, in case they reach the 90-60 criteria, will be required to obtain registration as a CIC. Several news reports also note this perception.
This perception among the market participants that CICs are not required to adhere to the PBC criteria stems from para 17(3) of the CIC Directions, which explicitly provides that:
“CICs need not meet the principal business criteria for NBFCs as specified under paragraph 38 of the Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Directions.”
It may be noted that the above-quoted provision, which has recently been made a part of the CIC Directions pursuant to the November 28 consolidation exercise, was earlier included in the FAQs released by RBI on CICs. FAQs are RBI staff views; whereas Directions or Regulations are a part of subordinate law; however, in the consolidation exercise, a whole lot of FAQs and circulars became a part of the Directions.
Going by the intent of the NBFC classification and categorisation, the above-quoted provisions seem more relevant for registered CICs, implying that CICs once registered need not meet the PBC on an ongoing basis. CICs predominantly hold investments in group companies and therefore satisfy the 90–60 thresholds, but often do not derive any financial income from such investments. Group investments, being strategic in nature, are rarely disposed of, and the dividend income from such investments depends on the dividend/payout ratio, which may be quite low. In several cases, such entities continue to earn income, say, by way of royalty for a group brand name. Even the slightest of non-financial income will seem to breach the PBC criteria, which may challenge the continuation of registration of the CIC as an NBFC. In order to redress this, the provision under para 17(3) of the CIC Directions provides that CICs need not meet the PBC criteria on an ongoing basis.
What is the basis of this argument? The definition of a CIC comes from para 3, which says as follows: “These directions shall be applicable to every Core Investment Company (hereinafter collectively referred to as ‘CICs’ and individually as a ‘CIC’), that is to say, a non-banking financial company carrying on the business of acquisition of shares and securities, and which satisfies the following conditions.” Para 17 (3) is a note to Para 17, which apparently deals with conditions of continued registration.
Given that CIC is a category of NBFC, it would be counter-intuitive to say that the regulatory requirement requires holding companies to go for registration as a CIC even if they do not meet the PBC for an NBFC. In fact, if an entity is not an NBFC because it fails the principality of its business, it would not even come under the statutory ambit of the RBI by virtue of section 45-IC.
Accordingly, without going by just the text of the regulations, in our view, considering the regulatory intent, the following could be inferred:
If there are group holding companies which have intra group investments, but also have operating income from one or more sources, such that the operating income is more than finanical income, these companies are not NBFCs at all. If they are not NBFCs, they cannot be CICs irrespctive of the extent of investment/loans as a part of their asset base. As we say this, we emphaise that the operating income shoudl be substantive and should be indicating a strategic business intent, rather than a pure one-off or passive income.
CICs are a type of NBFC.
Holding companies will be classified as a CIC in case they first meet the 50-50 criteria for NBFC and thereafter the 90-60 criteria as well. The registration requirement may then be ascertained based on the asset size and access to public funds by the CIC.
A CIC (registered or unregistered) need not meet the PBC criteria on an ongoing basis.
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Investment limits under Voluntary retention route (Rs. 2,50,000 crore) for investment in corporate bonds and G-secs have been merged and made a part of the limit assigned for regular investments by FPIs under General Route (15%, 2% and 6% of outstanding stock of Corporate debt securities, State Government securities and Central Government respectively); as a result, FPIs that commit to keep funds for at least 3 years may escape the restrictions applicable in case of corporate bonds relating to minimum residual maturity requirement and issue-wise limits on single FPI (not exceeding 50% of any issue). This introduces significant scope for those FPIs that are sure of staying invested in India for a long term, avoiding opportunism while granting them significant operational flexibility.
The Indian market has witnessed a sharp and sustained decline in FPI investments over the past few years, reflecting a clear shift toward net outflows. The data reflects a structural decline in FPI investments over the period, transitioning from strong inflows in 2020 to persistent net withdrawals from 2022 onwards. The brief stabilization in 2024 appears temporary rather than a trend reversal, suggesting continued caution or reallocation by FPIs in recent financial years.
The Budget 2026 may not have brought any significant regulatory amendments or reliefs for the financial sector entities, however, the regulator has proposed a box full of surprises for the regulated entities. The Statement on Developmental and Regulatory Policies dated February 6, 2026 has proposed various significant changes. The measures span a wide spectrum, from exempting Type 1 NBFCs (with no public funds and no customer interface) from registration, to stricter norms on sale of third-party products, a harmonised recovery agent framework, permission for bank lending to REITs and an increase of collateral-free loan limits for MSMEs, among others. While the detailed guidelines for each of the proposals are yet to be issued, we provide a quick snapshot and implications of these proposals.
1. Exemption from RBI registration for Type 1 NBFCs upto Rs 1000 crores in assets
After several years of regulatory supervision over investment companies and small size NBFCs, the RBI has proposed to exempt NBFCs having no public funds and customer interface, with asset size not exceeding ₹1000 crore, from the requirement of registration. This will bring such NBFCs, which are commonly referred to as Type 1 NBFCs, outside the purview of RBI supervision, compliance and reporting requirements.
Earlier, access to public funds and customer interface were factors for applicability of several regulations, but not for complete exemption.
Para 6(4) of under the RBI (NBFCs – Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025 (“RBI Master Directions”) defines customer interface as “interaction between the NBFC and its customers while carrying on its business”
In essence, customer interface exists where an NBFC directly deals with customers in the course of its business, such as sourcing borrowers, communicating loan terms, collecting repayments, or addressing grievances. The concept focuses on direct dealing/direct public engagement between the NBFC and its customers in the conduct of its business.
Entities engaged in capital market transactions such as trading in shares, investments etc are not seen as having customer interface.
As to whether lending intragroup results in customer interface, the question is contentious – see our article here. .
Currently, NBFCs that do not have any customer interface are exempt from the fair lending practice norms, KYC norms, CIC reporting requirements are such other customer centric compliances.
What is “Public Funds”
Public funds is defined under RBI Master Directions as “includes funds raised either directly or indirectly through public deposits, inter-corporate deposits, bank finance and all funds received from outside sources such as funds raised by issue of Commercial Papers, debentures etc. but excludes funds raised by issue of instruments compulsorily convertible into equity shares within a period not exceeding five years from the date of issue.”
The expression public funds is much wider than public deposits; public deposits are only one part of it. Public funds broadly mean all funds raised by an NBFC from sources other than its own or self-funds. The definition is inclusive and covers multiple forms of debt funding, while also leaving room for other similar sources. Importantly, public funds are to be understood in contrast with self-funds, such as equity capital, which represent ownership and not fundraising. Funds raised from group entities are generally not regarded as public funds; however, if a group entity merely acts as a conduit for funds raised from the outside sources, such funds will still carry the character of public funds due to the direct and clear nexus with the public source.
The use of public funds is a key trigger for prudential regulation, as the RBI seeks to ensure safety and stability where public money is involved. In the absence of access to public funds, NBFCs are exempted from complying with prudential regulations, liquidity risk management framework and LCR norms.
Why Customer Interface and Public Funds Are Important
The RBI uses customer interface and public funds as risk filters to determine the extent of regulatory oversight required for an NBFC. Entities that neither deal with external customers nor raise public funds are considered to pose minimal consumer and systemic risk.
In line with this risk-based approach, the RBI has proposed to exempt NBFCs with no customer interface and no public funds, and with asset size not exceeding ₹1,000 crore, from the requirement of registration.
2. No mis-selling of third party Financial Products
Banks and NBFCs routinely distribute third-party products alongside extending their core financial services. Such distribution is undertaken both through physical branches and through digital lending applications and platforms. It has, however, been frequently observed that certain banks and NBFCs take undue advantage of borrowers by using deceptive practices and dark patterns to sell third party products.
Dark patterns are tricky user interfaces “that benefit an online service by leading users into making decisions they might not otherwise make. Some dark patterns deceive users while others covertly manipulate or coerce them into choices that are not in their best interests[2]. Hence, there comes a need to regulate the same. The Central Consumer Protection Authority (“CCPA”), issued the Guidelines for Prevention and Regulation of Dark Patterns, 2023 to regulate such practices.
Digital lenders themselves may quite often be employing practices such as:
Drip pricing: elements of pricing which are not disclosed.
BNPL offerings: Please make it clear that after the so-called free credit period, if you choose to convert the purchase into financing, the same will start incurring interest. Give the offer to pay and avoid interest.
Adding subscriptions, donations or other discretionary items with EMIs or borrower payouts, if they are pre-ticked
Repeated and persistent messages or calls to avail credit facility Reduced ROI for a limited period to create false demand
Not opting for insurance in case of asset finance is shown as shaming the borrower of agreeing to keep the asset unsecured
Pressuring the borrower to share personal information like Aadhaar or credit card details, even when the information is not mandatory
Hiding the cancellation option to opt out of the loan/ close the loan during the cooling off period
Accordingly, there is a felt need to ensure that third party products and services that are being sold at the bank counters or lending platforms are suitable to customer needs and are commensurate with the risk appetite of individual clients. It has therefore been decided to issue comprehensive instructions to REs on advertising, marketing and sales of financial products and services. The draft instructions in this regard shall be issued shortly for public consultation.
3. Proposed comprehensive regulation for Recovery Agents
RBI has, from time to time, reminded lenders that they shall remain fully responsible for activities outsourced by them and, accordingly, are accountable for the conduct of their service providers, including recovery agents. In particular, the regulator has emphasised that lenders must ensure that neither they nor their agents engage in any form of intimidation or harassment, whether verbal or physical, during debt recovery.
While detailed guidelines governing the conduct of recovery agents are prescribed for HFCs, similar comprehensive guidelines are currently not specifically extended to NBFCs. RBI has now proposed that it will harmonise all the extant conduct-related instructions on engagement of recovery agents and other aspects related to the recovery of loans for all regulated entities.
An important requirement for recovery agents was with respect to the training of recovery agents. The recovery agents engaged by HFCs are required to undergo the training as prescribed by Indian Institute of Banking and Finance (IIBF) and obtain the certificate from the institute. If such training and certification requirements for recovery agents are extended to NBFCs, it will increase compliance and operational costs due to training expenses, certification fees, and time invested in upskilling agents. NBFCs may also need to strengthen their internal processes for onboarding, monitoring, and periodic re-certification of recovery agents. However, while this may raise short-term costs, it is likely to improve the quality of recoveries, reduce customer complaints and conduct risk, and strengthen long-term operational discipline.
4. Deregulated branch expansion
As per the RBI Branch Authorisation Directions, NBFC-ICCs engaged in the business of lending against gold collateral are required to obtain prior approval of the RBI to open branches exceeding 1,000. Further, deposit-taking NBFCs and HFCs are required to inform the RBI and NHB, respectively, before opening any branch.
RBI has proposed to dispense with the requirement of prior approval or intimation for opening branches by such NBFCs. The change is likely to reduce hurdles in opening new branches for gold loan NBFCs, allowing them to expand more quickly and grow their operations.
Type of NBFC
Erstwhile Requirement
Proposed Requirement
Deposit Taking NBFCs
Prior Intimation for the opening of branches
No need for prior intimation
HFCs
Prior Intimation to NHB before opening any branch
No need for prior intimation
NBFC-ICC (involved in gold lending)
Prior approval is required for branches exceeding 1000
No need for prior approval
The draft amendment directions have been issued here.
5. Bank Lending to REITs permitted
Banks were originally not permitted to lend to either InvITs or REITs, as these vehicles were created to refinance banks’ exposures in completed projects using market-based investor funds. While bank lending to InvITs was later allowed, subject to a prudential framework prescribed by the RBI. Banks must have a Board-approved policy governing InvIT exposures, covering appraisal, sanctioning, internal limits, and monitoring.
Prior to lending, banks are required to assess critical parameters including sufficiency of cash flows at the InvIT level, ensure that the combined leverage of the InvIT and its underlying SPVs remains within approved limits, and continuously monitor SPV performance, as the InvIT’s repayment capacity depends on these SPVs; banks must also consider the legal aspects of lending to trust structures, particularly enforcement of security. Lending is permitted only where none of the underlying SPVs with existing bank loans is facing financial difficulty, and any bank finance used by InvITs to acquire equity in other entities must comply with existing RBI restrictions.Lending to REITs, however, continued to be prohibited.
Regulatory Cap on Bank Investment in REITs/InvITs:
A bank shall not invest more than 10% of the unit capital of any single REIT or InvIT.
Such investment shall be within the overall ceiling of 20% of the bank’s net worth applicable to all direct investments in shares, convertible bonds/debentures, units of equity-oriented mutual funds, and exposures to AIFs.
In view of the strong regulatory, disclosure, and governance framework applicable to listed REITs, it is now proposed to permit commercial banks to lend to REITs, subject to appropriate prudential safeguards. At the same time, the existing lending framework for InvITs will be harmonised with the safeguards proposed for REITs to ensure consistency and parity across both structures.
The proposal allows banks to lend to REITs within a well-defined risk framework, ensuring financial stability is not compromised. The proposal brings regulatory consistency between REITs and InvITs, creating a more uniform and predictable regime. At the same time, it enables efficient recycling of capital from completed real estate and infrastructure projects, supporting new lending without adding significant systemic risk.
Review of the Business Correspondent Guidelines
A Business Correspondent (‘BC’) acts as an extension of a bank itself, to provide banking related services in areas which do not have access to such services. The intent of the BC model is financial inclusion, in order to connect everyone to the banking system. The scope includes among other things, creating awareness about savings and other products and education and advice on managing money and debt counselling, processing and submission of applications to banks, etc.
The activities to be undertaken by the BCs would be within the normal course of the bank’s banking business, but conducted through the BCs at places other than the bank premises/ATMs. Thus, the scope would not just be limited to marketing, sourcing and distribution of financial products, rather, it would be extended to provide banking services to the customers from the place of business of the BC.
Business Correspondents have been functioning as critical enablers of last mile access to financial services, particularly in respect of underserved, rural, and remote locations. Presently, BCs are regulated through RBI (Commercial Banks – Branch Authorisation) Directions, 2025. The Directions outline the eligibility criteria, due diligence requirements, oversight and monitoring, scope of activities, etc for engaging a Business Correspondent by banks.
RBI had set up a committee, consisting of officials from RBI , Department of Financial Service, Indian Banking Association and NABARD, to comprehensively examine their operations and make suitable recommendations for enhancing their efficiency. Discussions were held on action points of the previous meeting, Geotagging of BCs, Development of BC portal, Penalties imposed by banks on CBCs, Caution Money required from CBCs, BC Remuneration, participation of women in BC workforce etc.
Based on the Committee’s recommendations, the related regulatory guidelines are being reviewed, and the draft amendment directions will be issued shortly.
7. Collateral free loan limit for MSEs doubled to Rs 20 lacs
In 2010, following the RBI Working Group’s report (released March 6, 2010) on the Credit Guarantee Scheme (CGS) under CGTMSE, RBI mandated banks via circular in May 2010 to provide collateral-free business loans up to Rs. 10 lakh to Micro and Small Enterprises (MSEs).
A collateral-free business loan is an unsecured loan for business needs, requiring no pledge of assets like house, car, or property as mortgage until repayment backed by CGTMSE guarantee cover.
MSEs are defined under the MSMED Act, 2006 and require mandatory Udyam Registration for eligibility, bank loans, priority sector benefits, and CGTMSE coverage—along with no blacklisting, viable project, and engagement in approved manufacturing/service/retail activities. Classifications: Micro enterprise (investment in plant/machinery ≤ Rs. 2.5 crore; turnover ≤ Rs. 10 crore); Small enterprise (investment ≤ Rs. 25 crore; turnover ≤ Rs. 100 crore); and Medium enterprise (investment ≤ Rs. 125 crore; turnover ≤ Rs. 500 crore). Banks must enforce this at branches, linking CGS/CGTMSE usage to staff evaluations for strict compliance. This remains the existing statutory requirement for MSE lending.
RBI has decided to raise the collateral-free loan limit for MSEs from Rs. 10 lakh to Rs. 20 lakh, applicable to loans sanctioned or renewed on or after April 1, 2026, aiming to improve formal credit access, entrepreneurial activity, and last-mile delivery for collateral-scarce MSEs.
This policy shift represents a watershed moment for India’s grassroots economy, effectively doubling the financial runway for the nation’s most resilient entrepreneurs. By aligning with the PMMY ceiling, the policy ensures that a business’s potential rather than a proprietor’s personal property dictates its growth. This extra funding allows small businesses to move beyond daily expenses and finally invest in better machinery or technology to compete. Furthermore, it opens doors for women and young owners who may not own property to get formal bank support based purely on their performance. Ultimately, this change encourages more businesses to register officially, clearing the path for millions of small units to scale up and create more jobs without the fear of losing personal assets.
8. Total Return Swaps on Corporate Bonds
A Total Return Swap (TRS) is a derivative contract where a protection buyer exchanges the variable total return of an asset for a fixed return, shielding them from volatility. In this setup, the protection buyers swap the “total return” from the asset pool, with a return computed at a fixed spread on a base rate, say LIBOR. Protection sellers in a TRS guarantee a prefixed spread to protection buyers, who in turn, agree to pass on the actual collections and actual variations in prices on the credit asset to protection sellers. Essentially, the protection seller gains market exposure without a large upfront investment, while the protection buyer hedges their risk. Since protection sellers receive the total return from the asset, protection sellers also have the benefit of upside, if any, from the reference asset.
In India, the corporate bond market has historically lacked deep liquidity. To solve this, the Union Budget 2026 and the RBI have proposed introducing TRS specifically for corporate bonds and credit indices.
This development is a strategic shift toward “capital-efficient” investing. For business professionals, this means institutional investors can now gain exposure to corporate debt or hedge their existing bond portfolios without locking up massive amounts of capital on their balance sheets. By allowing the market to trade the “risk” and “returns” of bonds separately from the bonds themselves, the RBI aims to boost liquidity and make it easier for companies across various credit ratings to raise funds. Ultimately, this reform bridges a critical gap in India’s financial ecosystem, transforming the corporate bond market into a more active, transparent, and globally competitive space.
The draft amendment directions have been issued here.
Voluntary Retention Route subsumed into FPI investment limits
Voluntary retention route for investment bonds and G-secs has been merged and made a part of the limit assigned for regular investments by FPIs; as a result, FPIs that commit to keep funds for at least 3 years may escape the minimum residual maturity requirement and the limits on investment in a bond issue by a single FPI. This introduces significant flexibility for those FPIs that are sure of staying invested in India for a long term, avoiding opportunism while granting them significant flexibility.
According to the Master Direction – Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025, there are 5 channels of investments in debt instruments by non-resident investors. Under the VRR Route, FPIs are granted various operational exemptions, easing the investment process. VRR was introduced to encourage long term FPI investment in Indian debt markets by offering a dedicated investment channel with greater flexibility.
Given the strong utilisation of the VRR limits and to improve predictability and ease of doing business, the RBI has now decided to subsume VRR investments within the overall FPI investment limits under the General Route, while also providing additional operational flexibilities to FPIs investing through the VRR.
The detailed mechanism governing such limits has been notified here.
On November 28, 2025, the Reserve Bank of India (“RBI”) issued the Reserve Bank of India (Non-Banking Financial Companies – Managing Risks in Outsourcing) Directions, 2025 (“Outsourcing Directions”), thereby repealing the erstwhile directions governing IT outsourcing and financial services outsourcing. For the purposes of this article, our discussion is confined to Chapter IV of the Outsourcing Directions, which specifically deals with outsourcing of information technology (“IT”) services. While the Outsourcing Directions largely represent a consolidation of the existing regulatory framework as also clarified by the RBI in its Consolidation of Regulations – Withdrawal of Circulars dated November 28, 2025, they also provide enhanced clarity and structure to the regulatory expectations applicable to IT outsourcing arrangements of NBFCs. This article seeks to examine whether, and to what extent, any additional or expanded obligations have been introduced by the RBI under the consolidated framework.
Applicability
Chapter IV of the Outsourcing Directions, dealing with IT services outsourcing is applicable on NBFC-ML and above, which was also the case for the Erstwhile IT Outsourcing Directions
Transitional Timeline for Compliance of Existing IT Outsourcing Arrangements
The erstwhile IT Outsourcing Directions had become applicable with effect from October 1, 2023. Under the Outsourcing Directions, the RBI has now prescribed a specific transition mechanism for existing IT outsourcing arrangements. In this regard, para 2 of the Outsourcing Directions provides that:
“These Directions shall come into force with immediate effect
Provided that for Non-Banking Financial Companies covered under the scope of these Directions, as mentioned in paragraph 3, their existing Information Technology (IT) outsourcing agreements, regardless of whether they are due for renewal on or after the effective date of these Directions, shall comply with the provisions of these Directions either at the time of renewal or by April 10, 2026, whichever is earlier.”
Given that the Outsourcing Directions are primarily in the nature of a consolidation exercise and do not introduce materially new obligations, the timeline up to April 10, 2026 appears to be intended to provide NBFCs with a reasonable window to align their existing IT outsourcing agreements with the consolidated framework. Accordingly, NBFCs should utilise this transition period to review, amend, and, where necessary, renegotiate their existing IT outsourcing contracts to ensure full compliance with the Outsourcing Directions within the prescribed timeline.
Against this backdrop, it becomes important to examine the substantive requirements laid down under Chapter IV of the Outsourcing Directions in relation to outsourcing of IT services to third-party vendors. The following section discusses the key regulatory expectations and compliance obligations applicable to NBFCs when engaging third-party service providers for IT outsourcing.
Expanded scope of Service Provider Definition
The definition of “service provider” as defined under paragraph 58(3) of the Outsourcing Directions is expansive and extends beyond the primary contracting entity to include sub-contractors, third-party vendors, and entities forming part of the service delivery chain. Further the Outsourcing Directions under paragraph 58(4)have also now defined the term “sub-contractor” to mean:
“… those providing material / significant IT services to the service provider and is specific to the material / significant IT services arrangement that the NBFC has entered into with the service provider”
Accordingly, a sub-contractor that provides material or significant IT services to a service provider, where such services are critical to the delivery of the outsourced arrangement to the NBFC, would also fall within the ambit of the Outsourcing Directions. For instance, where an NBFC avails a SaaS solution from a third-party service provider, any entity that supplies core software or technology to such SaaS provider, without which the service cannot be effectively rendered, may be regarded as a material service provider for the purposes of the Outsourcing Directions.
While the erstwhile IT Outsourcing Directions did prescribe certain obligations in respect of sub-contractors (and the obligations of NBFCs vis-à-vis their primary service providers largely remain unchanged under the Outsourcing Directions), the current framework introduces greater clarity on who qualifies as a “sub-contractor.”
Actionables for NBFCs: NBFCs should reassess their existing IT outsourcing landscape to identify all arrangements that fall within the expanded scope, including indirect or layered service delivery models. Vendor inventories should be updated to capture not only primary service providers but also material sub-contractors and supply-chain entities involved in the provision of IT services. Furthermore, NBFCs are advised suitably amend its existing policies to clearly specify the framework and criteria for identification of sub-contractors. This may, inter alia, include requiring service providers to furnish a list of their appointed sub-contractors along with details of the functions performed by each, and undertaking an assessment, in consultation with the relevant service provider, to determine whether such sub-contractors are material or non-material.
Audit and Due Diligence
The Outsourcing Directions require NBFCs to conduct risk-based due diligence of IT service providers, this includes tracking system performance, uptime, service availability, Service Level Agreement, compliance and incident response on an ongoing basis. Regular risk-based audits of service providers, including sub-contractors, have been formalised, with an option to rely on pooled audits or recognised third-party certifications, though this does not dilute the NBFC’s responsibility for data security and system availability. NBFCs must also periodically review the financial and operational strength of service providers to identify any deterioration in performance, security or resilience. Access rights have been strengthened, requiring service providers to provide unrestricted access to relevant data and premises for NBFCs, auditors and regulators.
Actionables for NBFCs:
NBFCs should strengthen vendor due diligence processes and establish mechanisms for periodic review of service providers. Oversight frameworks should extend to subcontractors and material supply-chain entities, with clear accountability resting on the primary service provider. Overall, the changes make due diligence an ongoing obligation rather than a one-time exercise, requiring NBFCs to strengthen internal monitoring structures, audit planning and vendor risk management practices.
Further, considering that the RBI has mandated compliance of the agreements with the Outsourcing Directions by April 10, 2026, it is advisable for NBFCs to undertake a comprehensive review of the service level agreements and other contractual arrangements executed with all its material IT vendors to ensure alignment with the requirements set out under paragraphs 33, 34, 73 and 74 of the Outsourcing Directions.
Additionally, prior to April 10, 2026, NBFCs are suggested to conduct audits of its material service providers to verify:
compliance with the contractual obligations agreed between the NBFC and the respective vendor; and
adherence by such vendors to the applicable requirements prescribed under the IT outsourcing framework.
Alternatively, the Company may also rely on globally recognised third-party certifications made available by the service provider in lieu of conducting independent audits.
Where, based on such review or audit, the NBFC forms the view that a vendor is not in compliance with the contractual terms or applicable regulatory requirements, the NBFC should require the vendor to implement corrective action within defined timelines and, where necessary, amend or renegotiate the existing agreements to ensure alignment with the Outsourcing Directions.
Further, the NBFC should appropriately document such reviews, audits, and remediation measures and place the same before the senior management, in accordance with the requirements of paragraph 78 of the Outsourcing Directions, and/or before such a committee as may be identified under the NBFC’s IT Outsourcing Policy. Any material or adverse developments should also be escalated to the Board in alignment with the requirements of paragraph 78 of the Outsourcing Directions.
In cases where remediation or contractual modification is not feasible, the Company should maintain an exit plan/exit strategy, including identification of alternate service providers and/or arrangements for bringing the outsourced services in-house, so as to ensure continuity of critical operations and minimal disruption to customers.
Conclusion
The Outsourcing Directions mark a significant step by the RBI towards consolidating and strengthening the regulatory framework governing IT outsourcing by NBFCs. While the underlying obligations remain broadly consistent with the erstwhile regime, the transition period up to April 10, 2026 provides NBFCs with a critical opportunity to holistically reassess their IT outsourcing arrangements, rationalise vendor ecosystems, and embed robust contractual, operational, and governance safeguards. NBFCs that proactively undertake structured reviews, strengthen vendor risk management, and institutionalise ongoing monitoring mechanisms will be better positioned not only to achieve regulatory compliance but also to enhance operational resilience and customer trust.
Ultimately, IT outsourcing under the Outsourcing Directions is no longer a purely contractual or procurement function—it is a core governance and risk management responsibility. Treating it as such will be essential for NBFCs navigating an increasingly digital and interconnected financial services ecosystem.
https://vinodkothari.com/wp-content/uploads/2023/06/vinod-kothari-logo.png00Staffhttps://vinodkothari.com/wp-content/uploads/2023/06/vinod-kothari-logo.pngStaff2026-02-06 10:51:052026-02-06 10:51:07IT Outsourcing Under the RBI’s 2025 Directions: What Has Changed?
