Reserve Bank of India (RBI) issued Circular RBI/2024-25/101 on January 1, 2025, permitting the National Bank for Financing Infrastructure and Development (NaBFID) to participate as an All-India Financial Institution (AIFI) in financial markets. This decision aligns with earlier notifications and master directions regulating AIFIs under the RBI Act, 1934. NaBFID can now undertake credit default swaps and repurchase (repo) transactions in accordance with the Master Directions on Credit Derivatives (2022) and Repo Transactions (2018).
This circular updates relevant directions to explicitly include NaBFID in financial market operations regulated by the RBI. These changes, effective immediately, reinforce the regulatory framework for NaBFID’s activities in promoting infrastructure development. The move ensures clarity and compliance under Sections 45L, 45N, 45U, and 45W of the RBI Act.
Reserve Bank of India
RBI/2024-25/101
FMRD.DIRD.No.09/14.03.004/2024-25 Dated: January 01, 2025
To
All eligible market participants
Madam/Sir,
Participation of NaBFID as an AIFI in financial markets
Please refer to the press release dated March 09, 2022 wherein it was communicated that the National Bank for Financing Infrastructure and Development (NaBFID) shall be regulated and supervised as an All-India Financial Institution (AIFI) by the Reserve Bank under Sections 45L and 45N of the Reserve Bank of India Act, 1934 and the Master Direction – Reserve Bank of India (Prudential Regulations on Basel III Capital Framework, Exposure Norms, Significant Investments, Classification, Valuation and Operation of Investment Portfolio Norms and Resource Raising Norms for All India Financial Institutions) Directions, 2023 dated September 21, 2023 which specify that AIFIs can undertake credit default swap and repo transactions, in terms of Master Direction – Reserve Bank of India (Credit Derivatives) Directions, 2022 and the Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018, as amended from time to time.
2. In this regard, the following Directions have been updated, as attached, to amply clarify that NaBFID is permitted to participate as an AIFI in financial markets regulated by the Reserve Bank:
i. Master Direction – Reserve Bank of India (Credit Derivatives) Directions, 2022; and
ii. Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018 (Updated as on November 28, 2019).
3. The Directions shall be applicable with immediate effect.
44. The Directions contained in this circular have been issued in exercise of the powers conferred under section 45W of the Reserve Bank of India Act, 1934 read with section 45U of the Act and of all the powers enabling it in this behalf.
Yours faithfully,
(Dimple Bhandia)
Chief General Manager
