RBI releases draft amendments to streamline securitisation notes framework

The Reserve Bank of India (RBI) has issued draft **(Securitisation Transactions) Amendment Directions, 2026** for public comments, signalling a constructive step towards making the market for **Securitisation Notes (SNs)** more efficient, liquid and transparent.

The draft proposals align with the RBI’s stated objective of strengthening how SNs are issued and how they can be transferred after issuance. For lenders and investors, a clearer and more streamlined framework can support smoother market participation, better price discovery and stronger confidence—while continuing to keep prudential safeguards at the centre.

What the RBI has proposed

In its press release, the RBI said it has issued the following draft Amendment Directions for consultation:

• **Reserve Bank of India (Commercial Banks – Securitisation Transactions) Amendment Directions, 2026**
• **Reserve Bank of India (Small Finance Banks – Securitisation Transactions) Amendment Directions, 2026**
• **Reserve Bank of India (Non-Banking Financial Companies – Securitisation Transactions) Amendment Directions, 2026**
• **Reserve Bank of India (All India Financial Institutions – Securitisation Transactions) Amendment Directions, 2026**

By covering commercial banks, small finance banks, NBFCs and All India Financial Institutions, the consultation is designed to support consistency across key parts of India’s credit ecosystem. This breadth matters because securitisation-related activity often involves multiple types of regulated entities—originators, arrangers, and other participants—working together.

The RBI’s focus in this consultation is on improving:

• **Efficiency** in issuance and subsequent transfers of SNs
• **Liquidity**, which can help deepen participation and enable smoother secondary transactions
• **Transparency**, which supports informed decision-making and robust market practices

While the draft text itself will be the primary reference for detailed changes, the direction of travel is clear: a more orderly and well-functioning securitisation notes market that can complement India’s broader efforts to strengthen financial markets and credit delivery.

Consultation timeline and how stakeholders can respond

The RBI has invited comments from the public and stakeholders **until 27 August 2026**.

Feedback can be submitted through the link under the **‘Connect2Regulate’** section on the RBI’s website. The central bank has also provided alternative routes for sending comments—by post to the **Chief General Manager, Credit Risk Group, Department of Regulation, Central Office, Reserve Bank of India, Mumbai**, or by email (as indicated in the RBI communication).

This consultative approach offers financial institutions, market participants, industry bodies and interested members of the public an opportunity to share practical inputs. Such feedback can help ensure that final directions balance market development with strong risk management, especially as securitisation structures and investor participation evolve.

A constructive signal for market development

Securitisation can play a useful role in the broader credit landscape by enabling lenders to manage balance sheets and recycle capital, while offering investors access to diversified cash-flow backed instruments. When supported by clear rules and consistent disclosures, these markets can contribute to the resilience and depth of the financial system.

The RBI’s emphasis on the issuance and transferability of Securitisation Notes suggests an intent to make transactions more straightforward and transparent across the life cycle—right from issuance to subsequent transfers. For India’s growing economy and expanding financial sector, steady regulatory refinement of such frameworks can support long-term market confidence.

**Why it matters:** A more efficient, liquid and transparent framework for Securitisation Notes can help strengthen market functioning, encourage wider participation and support smoother capital flow—benefiting credit intermediation while maintaining prudent safeguards.