RBI Amends Investment Valuation Norms for InvITs and REITs

RBI Updates Valuation Norms for InvIT and REIT Investments

The Reserve Bank of India has amended investment valuation guidelines for Asset Reconstruction Companies (ARCs), Small Finance Banks (SFBs), and Payments Banks concerning holdings in Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs).

The revised norms prescribe separate methodologies for quoted, unquoted, and infrequently traded units, mandating use of NAV-based valuation, independent third-party valuation for illiquid instruments, and periodic re-rating. The amendments aim to ensure prudential asset classification and accurate risk assessment in investment portfolios.

Regulated entities must align internal valuation frameworks with the new standards. These changes will impact balance sheet reporting and risk capital calculations for financial institutions holding securitised infrastructure assets.