RBI Rewrites How Financial Institutions Value InvIT and REIT Units, Effective Immediately

The Reserve Bank of India issued a set of amendment directions on Tuesday that changes how all-India financial institutions must value their holdings in infrastructure investment trusts and real estate investment trusts, closing a gap that had left different institutions marking similar assets in different ways.

The rules are formally titled the Reserve Bank of India (All India Financial Institutions – Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026. They came into force from the date of issue, with no transition window.

What Actually Changed

The amendment modifies Chapter VI of the principal directions the central bank issued on November 28, 2025, and works by inserting two new provisions rather than rewriting existing ones. Paragraph 58A now governs instruments issued by InvITs. Paragraph 58B does the same for REITs.

For quoted units of either kind of trust, the treatment is straightforward: institutions must value them following the instructions that already apply to quoted securities, adapted as necessary. Market price does the work, as it always has.

The more consequential change sits on the unquoted side. Where a REIT fails to compute and disclose its net asset value in the manner and at the frequency required under the SEBI (Real Estate Investment Trusts) Regulations, 2014, the value of its units must be treated as Re 1 for the purposes of these directions.

A Re 1 Valuation Is a Deliberate Penalty

That last provision is worth pausing on. Writing an asset down to a single rupee is not an attempt to estimate its worth. It is a disclosure incentive dressed as an accounting rule, and the RBI has used the same device elsewhere in its investment-valuation framework. A trust that does not publish NAV on schedule leaves institutional holders with nothing defensible to mark against, so the regulator has removed the discretion to guess.

The practical effect is to push the compliance burden outward. An all-India financial institution holding unquoted REIT units now has a direct balance-sheet reason to insist that the trust meets its SEBI disclosure obligations, because the alternative is a near-total write-down regardless of the underlying assets.

The central bank said the amendments were made to eliminate ambiguity and establish standardised procedures across institutions, which reads as an acknowledgement that the 2025 directions had left the treatment of these instruments open to interpretation.

Who It Applies To

The directions cover the all-India financial institutions regulated by the RBI, a small but systemically significant group that includes NABARD, SIDBI, EXIM Bank, the National Housing Bank and the National Bank for Financing Infrastructure and Development. These are development-focused lenders whose portfolios increasingly include exactly the kind of infrastructure and real estate trust exposure the amendment addresses.

Parallel amendments have been made to the corresponding investment valuation norms applicable to commercial banks and local area banks, suggesting the RBI is harmonising the treatment across the institutions it supervises rather than carving out a special regime for development finance.

The Wider Context

InvITs and REITs have grown into a meaningful channel for recycling capital out of completed roads, transmission lines and commercial property in India, and regulated financial institutions are among the natural buyers of their units. As those holdings scale, inconsistent valuation stops being a technical irritant and starts becoming a comparability problem across balance sheets.

Tuesday's amendment does not change what these institutions may invest in. It changes what they must show when they do.

This is an original summary based on public reporting. See our editorial policy for how we source, write, and correct our stories.