**Executive Summary**
This document, issued by the Reserve Bank of India (RBI) on February 6, 2026, presents the "Reserve Bank of India (Non-Banking Financial Companies – Branch Authorisation) Amendment Directions, 2026". It amends the "Reserve Bank of India (Non-Banking Financial Companies – Branch Authorisation) Directions, 2025," providing operational flexibility to Non-Banking Financial Companies (NBFCs) for branch expansion while ensuring compliance. The document is released as a draft for comments. These Amendment Directions come into force with immediate effect.
**Key Points / Main Content**
* **Amendment Scope**: Amends the "Reserve Bank of India (Non-Banking Financial Companies – Branch Authorisation) Directions, 2025".
* **Applicability of Directions**:
* Paragraphs 5 and 12 are applicable to deposit-taking NBFCs registered with the RBI and deposit-taking HFCs registered with RBI.
* Paragraphs 13 to 15 are applicable to CIC registered with the RBI.
* Paragraphs 6, 10 to 11, and 13 to 15 are applicable to certain NBFC categories: HFCs, NBFC-D, NBFC-ICC, NBFC-Factor, NBFC-MFI, NBFC-IFC, and IDF-NBFC, all registered with the RBI.
* **Changes to the Master Direction**:
* In subsection A1 of the Master Direction, the following shall be substituted: “Opening of Branches in India.”
* In paragraph 6 of the Master Direction, the following shall be substituted: “An NBFC is generally permitted to open branches without having the need to obtain prior approval from RBI, unless otherwise specifically restricted.”
* Subsections A2 and A3 including paragraphs 7, 8 and 9 of the Master Direction shall stand deleted.
**Impact Analysis**
**Stakeholder: Non-Banking Financial Companies (NBFCs)**
**Impact**: NBFCs gain greater operational flexibility regarding branch expansion. They are now generally permitted to open branches without prior RBI approval unless specifically restricted.
**Action Required**: NBFCs must adhere to the revised guidelines when planning and executing branch expansions. They must also familiarize themselves with the specific applicability of the directions based on their category (e.g., deposit-taking, HFC, CIC).
**Stakeholder: Reserve Bank of India (RBI)**
**Impact**: The RBI retains the authority to impose specific restrictions on NBFC branch expansions as deemed necessary.
**Action Required**: The RBI must ensure that it effectively communicates and enforces the revised guidelines to NBFCs.
Key Entities Referenced
Reserve Bank of India (Non-Banking Financial Companies – Branch Authorisation) Amendment Directions, 2026: The primary subject of the document, outlining amendments to branch authorization rules for Non-Banking Financial Companies.
Reserve Bank of India (Non-Banking Financial Companies – Branch Authorisation) Directions, 2025: The 'Master Directions' being amended by the current document, related to the authorization of branches for Non-Banking Financial Companies.
Reserve Bank of India (RBI): The central bank of India, responsible for issuing the directions and overseeing Non-Banking Financial Companies.
RBI Act, 1934: The Reserve Bank of India Act, which provides the legal framework for the RBI's powers and functions.
National Housing Bank Act, 1987: Act that empowers the National Housing Bank which works in conjunction with the RBI in the context of housing finance companies.
भारतीय �रज़वर् बैंक
RESERVE BANK OF INDIA
RBI/2025-26/
DOR.RAUG.REC.No.XXX /23-27-013/2025-26 February 06, 2026
Reserve Bank of India (Non-Banking Financial Companies – Branch
Authorisation) Amendment Directions, 2026 – Draft for Comments
The Reserve Bank had issued the Reserve Bank of India (Non-Banking Financial
Companies – Branch Authorisation) Directions, 2025 (hereafter referred as the
‘Master Directions’), on November 28, 2025, as amended from time to time. There is
a need to further amend the same to provide operational flexibility to the NBFCs for
branch expansion while ensuring necessary compliance.
2. Accordingly, in exercise of the powers conferred by Chapter IIIB of the Reserve
Bank of India Act, 1934, and Sections 30A of the National Housing Bank Act, 1987
and all other provisions / laws enabling the Reserve Bank of India (‘RBI’) in this
regard, the Reserve Bank having considered it necessary in the public interest,
hereby, issues the following Amendment Directions.
3. These Directions shall be called the Reserve Bank of India (Non-Banking
Financial Companies – Branch Authorisation) Amendment Directions, 2026.
4. These Amendment Directions shall come into force with immediate effect.
5. The Reserve Bank of India (Non-Banking Financial Companies – Branch
Authorisation) Directions, 2025 are amended as provided below:
i) In paragraph 3 (1) of the Master Direction, the following shall be
substituted:
3 (1) These Directions shall be applicable to the following Non-Banking
Financial Companies (hereinafter collectively referred to as ‘NBFCs’ and
individually as an ‘NBFC’), for all layers:
(i) The provisions contained in paragraphs 5 and 12 shall be applicable to
deposit taking NBFCs registered with the RBI under the provisions of theRBI Act, 1934 and deposit taking HFCs registered with RBI under the
provisions of the NHB Act, 1987;
(ii) The provisions contained in paragraphs 13 to 15 shall be applicable to
CIC registered with the RBI under the provisions of the RBI Act, 1934;
(iii) The provisions contained in paragraphs 6, 10 to 11 and 13 to 15 shall be
applicable to the following categories of NBFCs:
(a) HFCs registered with the RBI under the provisions of the NHB Act,
1987;
(b) NBFC-D registered with the RBI under the provisions of the RBI Act,
1934;
(c) NBFC-ICC registered with the RBI under the provisions of the RBI
Act, 1934;
(d) NBFC-Factor registered with the RBI under the provisions of the
Factoring Regulation Act, 2011;
(e) NBFC-MFI registered with the RBI under the provisions of the RBI
Act, 1934;
(f) NBFC-IFC registered with the RBI under the provisions of the RBI Act,
1934;
(g) IDF-NBFC registered with the RBI under the provisions of the RBI Act,
1934;
ii) In subsection A1 of the Master Direction, the following shall be substituted:
“Opening of Branches in India.”
iii) In paragraph 6 of the Master Direction, the following shall be substituted:
“An NBFC is generally permitted to open branches without having the need to
obtain prior approval from RBI, unless otherwise specifically restricted.”
iv) Subsections A2 and A3 including paragraphs 7, 8 and 9 of the Master
Direction shall stand deleted.
Yours faithfully,
Chief General Manager