NBFD Rules Amendment: FinMin Introduces 0.1% Concessional Guarantee Fee for Foreign Borrowings [Read Notification]

The Ministry of Finance, through the Department of Financial Services, has issued Notification No. G.S.R. 514(E) dated 30th July 2025, announcing a significant amendment to the National Bank for Financing Infrastructure and Development (NBFD) General Rules, 2022.

As per the amendment, a new Rule 10 has been inserted, which introduces a concessional government guarantee fee of 0.1% for loans borrowed by the NBFD from certain international sources. These include multilateral institutions, sovereign wealth funds, and other foreign institutions as specified by the Central Government.

This move is aimed at reducing the cost of international borrowings for infrastructure development in India, thereby supporting the government’s push for improved long-term infrastructure financing.

The notification further states that the concessional fee may be reduced even further for loans taken for specific purposes aligned with government mandates. To avail this, the NBFD must submit a formal request to the Central Government, detailing the amount borrowed, involved parties, and intended use of the funds.

Under the new rule:

• The 0.1% guarantee fee will be payable when the government guarantee is obtained and then annually every 1st of April.
• The concessional fee will also be subject to additional conditions that may be imposed by the government.

This amendment, called the National Bank for Financing Infrastructure and Development General (Amendment) Rules, 2025, takes effect from the date of its publication in the Official Gazette.

The original NBFD General Rules were first notified on 28 January 2022, and were last amended on 15 July 2022. This latest update reflects the government’s ongoing efforts to attract global capital for infrastructure projects and offer more favorable terms for borrowing.

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