The new Reserve Bank of India’s (RBI) latest directives will help corporates to raise cheaper funds and gain more efficient access to capital markets. The RBI’s non-fund based credit facilities directions, 2025, particularly the provisions around partial credit enhancement (PCE), aim to improve the credit ratings of corporate bonds. This enhancement enables corporates/special purpose vehicles (SPVs) and even municipal bodies to tap into the bond market at more favorable terms, effectively lowering their cost of borrowing. The final directive, issued on August 6, will come into effect from April 1, 2026. These directions consolidate and harmonise the regulatory framework for non-fund based (NFB) instruments such as guarantees, letters of credit, and co-acceptances across regulated entities (REs), including banks, cooperative banks, All India Financial Institutions (AIFIs), and NBFCs/HFCs in the middle layer and above.