Notification No. RBI/DOR/202526/138DOR.RAUG.AUT.REC.No.343/24.01.041/2025-26; dated: 05.12.2025
1. Regulatory Background
The Reserve Bank of India (RBI) has released the 2025 Directions on “NBFCs – Undertaking of Financial Services”, replacing the earlier RBI (NBFC–Undertaking of Financial Services) Master Directions, 2025, which were issued on November 28, 2025. The revised framework is part of RBI’s broader harmonisation exercise aimed at strengthening prudential supervision, governance, and group-level risk management.
2. Effective Date
The new Directions will come into force from December 5, 2025. All entities falling within the scope of this framework must comply with updated norms from this date onward.
3. Applicability
The 2025 Directions shall apply to:
- Non-Banking Financial Companies (NBFCs)
- Housing Finance Companies (HFCs) governed under RBI supervision
- Any NBFC that is a group entity of a Scheduled Commercial Bank
Such NBFCs must ensure compliance with all relevant prudential, operational, and governance provisions prescribed under the updated Directions, without exception.
4. Key Regulatory Focus
The revised Directions aim to:
- Strengthen group-level supervision and risk containment
- Ensure that NBFCs owned or controlled by Scheduled Commercial Banks do not undertake unregulated or non-core financial service activities without adequate oversight
- Improve capital discipline, exposure management, and governance clarity across financial conglomerates
- Provide a uniform regulatory perimeter for entities operating within banking-led financial groups
5. Compliance Considerations
NBFCs falling under a banking group must:
- Review their business models, structures, and exposures to ensure alignment with the new Directions
- Strengthen internal risk management frameworks, governance standards, and reporting systems
- Ensure clear operational segregation between core bank activities and NBFC-related business
- Align group-wide compliance manuals, SOPs, exposure policies, and disclosures with updated requirements
Non-compliance may attract enhanced supervisory scrutiny, restrictions on business operations, or corrective regulatory measures.
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