On July 27, 2026, the Reserve Bank of India (“RBI”) issued draft amendment directions proposing changes to the Reserve Bank of India (Commercial Banks – Securitisation Transactions) Directions, 2025 (“Directions”). The proposed amendments primarily address the form in which securitisation notes may be issued, held and transferred, the minimum ticket size applicable to investments in such notes and the circumstances in which an offer of securitisation notes would be regarded as an offer to the public. If notified in their present form, the amendments are proposed to come into force on October 1, 2026.

The proposed changes are significant from a transaction structuring and documentation perspective. They would require market participants to consider regulatory compliance not only at the time of issuance of securitisation notes, but also throughout their lifecycle and in connection with subsequent transfers.

Mandatory Dematerialisation

The RBI has proposed to substitute paragraph 27 of the Directions to provide that the issuance, holding and subsequent transfer of securitisation notes shall only be in dematerialised form.

Accordingly, securitisation notes would be required to remain in dematerialised form throughout their lifecycle, including:

At the time of original issuance;
During the period for which they are held by investors; and
Upon any subsequent transfer.

The proposed requirement would require transaction participants to ensure that the operational arrangements and transaction documentation are consistent with dematerialised issuance and transfer. Originators, special purpose entities (“SPEs”), trustees and investors may consequently need to address the relevant depository, holding and transfer arrangements at the structuring stage itself.

Minimum Ticket Size

The proposed substituted paragraph 27 also provides that the minimum ticket size for securitisation notes shall be ₹1 crore at the time of issuance as well as at the time of any subsequent transfer. For this purpose, the RBI has clarified that “ticket size” means the size of investment made by a single investor.

A significant aspect of the proposal is that the minimum ticket-size requirement would not be confined to the initial issuance of securitisation notes. The requirement would continue to apply to subsequent transfers as well.

Accordingly, transaction participants may need to ensure that transfer arrangements do not permit transactions that result in non-compliance with the prescribed minimum investment threshold. Transfer provisions in the relevant transaction documents may therefore need to contain appropriate restrictions, representations, conditions and procedures.

Continuing Compliance by the SPE

The draft amendments further propose that the agreement between the originator and the SPE should contain a clause requiring compliance with the minimum ticket-size requirement on an ongoing basis.

This proposal is particularly relevant from a legal documentation perspective because it expressly requires the regulatory obligation to be reflected in the contractual arrangements between the originator and the SPE.

The relevant documentation may therefore need to address:

The issuance, holding and transfer of securitisation notes only in dematerialised form;

Compliance with the ₹1 crore minimum ticket size at the time of issuance;

Compliance with the minimum ticket size in respect of every subsequent transfer;

The continuing obligation of the SPE to ensure compliance with the applicable requirement; and

Transfer procedures and restrictions designed to prevent non-compliant transfers.

The proposed amendment would therefore make the originator-SPE agreement an important instrument for allocating and recording responsibility for ongoing regulatory compliance.

Public Offer Threshold

The RBI has also proposed to substitute paragraph 28 of the Directions.

Under the proposed framework, an offer of securitisation notes would be deemed to have been made to the public where the offer is made to a number of persons that meets or exceeds the limit prescribed under Regulation 21 of the Securities and Exchange Board of India (Issue and Listing of Securitised Debt Instruments and Security Receipts) Regulations, 2008, as amended from time to time.

The proposed amendment links the determination of whether an offer constitutes an offer to the public with the threshold prescribed under the relevant SEBI regulations.

This would make the proposed investor base and the manner in which securitisation notes are offered and distributed important structuring considerations. Originators, arrangers and other transaction participants may need to assess the proposed number of offerees and the manner of solicitation with reference to the applicable regulatory threshold.

Documentation and Structuring Impact

If the draft amendments are notified substantially in their present form, securitisation transaction documents may require review and corresponding amendments.

Particular consideration may be required in relation to:

The exclusive use of dematerialised form for the issuance, holding and transfer of securitisation notes;

Compliance with the ₹1 crore minimum ticket size at issuance;

Continued compliance with the minimum ticket size upon every subsequent transfer;

The inclusion of an express ongoing compliance obligation in the agreement between the originator and the SPE;

Transfer restrictions and procedures to prevent non-compliant transactions; and

The proposed investor base and offer structure in light of the threshold prescribed under Regulation 21 of the applicable SEBI regulations.

The proposed amendments therefore have implications beyond the form of the securitisation notes themselves. They may affect transaction structuring, investor eligibility and transfer mechanics, as well as the allocation of responsibilities among the originator, SPE, trustee and investors.

The RBI’s proposals focus on establishing a more defined framework for the issuance and circulation of securitisation notes. Mandatory dematerialisation would introduce a uniform form requirement across the lifecycle of the instrument, while the application of the ₹1 crore minimum ticket size to both initial issuance and subsequent transfers would make compliance an ongoing consideration.

The requirement for the originator-SPE agreement to contain an express provision addressing continuing compliance is equally significant. It reinforces the importance of ensuring that regulatory requirements are translated into enforceable contractual obligations within the transaction framework.

As the amendments remain in draft form, the final directions may be modified before they are formally notified. However, if implemented substantially as proposed, market participants may need to review their existing securitisation structures and documentation to ensure readiness for the revised framework proposed to take effect from October 1, 2026.

Securitisation Notes: RBI’s Proposed Changes