RBI Eases Risk-Weight Norms for NBFC Infra Loans

Current Context: The Reserve Bank of India (RBI) issued fresh guidelines on January 1, 2026 revising the risk-weighting framework for NBFCs’ exposure to infrastructure loans.

• Under the new norms, effective April 1, 2026, risk weights will be reduced if projects meet repayment milestones.
• Loans where at least 2% of sanctioned debt is repaid will attract a 75% risk weight, while those with 5% repayment qualify for a 50% risk weight.
• Projects failing to meet these thresholds will face higher risk weights, ensuring stricter capital adequacy.
• These changes form part of the Prudential Norms on Capital Adequacy (Amendment) Directions, 2026 under the RBI Act, 1934.
• The move aims to balance financial stability with infrastructure growth, encouraging disciplined repayment and safeguarding NBFC balance sheets.

Question:

Q.1 Under the new norms, what is the reduced risk weight applicable for an infrastructure project loan where 5% of the sanctioned debt has been repaid?
a) 25%
b) 50%
c) 75%
d) 100%

Answer: b) Loans where at least 2% of sanctioned debt is repaid will attract a 75% risk weight, while those with 5% repayment qualify for a 50% risk weight.