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The Reserve Bank of India has introduced revised directions for payments banks regarding how they classify and value their investments in Infrastructure Investment Trusts and Real Estate Investment Trusts.
Key points
- Issued by the Reserve Bank of India on September 22, 2026 under the Banking Regulation Act, 1949.
- Introduces new paragraphs 83A and 83B covering InvITs and REITs investment portfolios for payments banks.
- Unquoted units failing SEBI disclosures or classified as infrequently traded must be valued at ₹1.
The Reserve Bank of India (RBI) has issued fresh guidelines tightening the framework for how payments banks handle their investment portfolios in alternative instruments. Under the newly released Reserve Bank of India (Payments Banks – Classification, Valuation, and Operation of Investment Portfolio) Second Amendment Directions, 2026, the central bank has established clear valuation rules for holdings in Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs).
Released on September 22, 2026, by Chief General Manager Sunil T S Nair, the updated regulations exercise powers conferred by Section 35A of the Banking Regulation Act, 1949. The amendments modify the previous 2025 master directions to establish uniform practices across the banking sector when valuing quoted and unquoted trust units.
New Valuation Standards for Quoted and Unquoted Trust Units
The revised framework categorizes trust holdings into quoted and unquoted instruments. Quoted securities and units issued by InvITs and REITs must be valued strictly according to the existing general instructions outlined in the parent directions for quoted securities.
For unquoted instruments, the guidelines draw a hard line based on regulatory compliance and market liquidity. Unquoted units must be valued at the Net Asset Value (NAV) officially disclosed by the respective trust. However, a stringent penalty mechanism applies if a trust fails to compute and disclose its NAV in compliance with Securities and Exchange Board of India (SEBI) regulations.
- Quoted InvIT and REIT units follow standard quoted security valuation methodologies.
- Unquoted units must match the NAV disclosed per SEBI (InvIT and REIT) Regulations, 2014.
- Failing trusts or infrequently traded units face a mandatory asset write-down valuation of ₹1.
What this means for investors
For investors monitoring the financial health and asset quality of payments banks, these updated guidelines remove ambiguity around alternative asset holdings. By enforcing a strict ₹1 valuation rule on non-compliant or illiquid unquoted trust units, the RBI ensures that payments banks maintain conservative, transparent balance sheets without inflating the worth of opaque or dormant holdings.
While payments banks generally focus on transactional services rather than large alternative asset allocations, institutional transparency remains paramount. Investors should review how financial institutions adjust their reported investment portfolios to comply with these rigorous reporting standards, particularly regarding unquoted infrastructure and real estate instruments.
Frequently asked questions
Question? When did the RBI amendments come into effect?
Answer. The Second Amendment Directions, 2026 came into effect immediately from the date of issue on September 22, 2026.
Question? What happens if an InvIT or REIT fails to disclose its NAV?
Answer. If the trust fails to compute and disclose its NAV as mandated by SEBI, or if the units are classified as infrequently traded, payments banks must value those units at ₹1.
This article is for information only and is not investment advice. Do your own research or consult a licensed adviser before investing.
Based on information published by Reserve Bank of India (RBI) — notifications. Source: Reserve Bank of India (RBI) — notifications. Spotted an error? corrections@moneypuran.com
