**Executive Summary**
These Directions, issued by the Reserve Bank of India (RBI) on February 26, 2026, amend the Non-Banking Financial Companies – Miscellaneous Directions, 2025. They are effective immediately and aim to facilitate the National Urban Co-operative Finance and Development Corporation Limited (NUCFDC) in granting membership to Urban Co-operative Banks (UCBs) by permitting offers for private placement of equity shares to more than 200 persons annually. These Directions are in force until March 31, 2029.
**Key Points / Main Content**
* **Purpose of Amendment:** To enable the NUCFDC to fulfill its mandate of strengthening the UCB sector by overcoming restrictions on private placement of equity shares.
* **Effective Date:** The amendment comes into force with immediate effect.
* **Issuing Authority:** Reserve Bank of India.
* **Affected Directions:** These Directions modify the Reserve Bank of India (Non-Banking Financial Companies – Miscellaneous) Directions, 2025.
* **Private Placement Exemption:** NUCFDC is permitted to offer or invite subscriptions to its equity shares on a private placement basis to more than 200 persons in aggregate in a financial year.
* **Conditions for Private Placement:**
* NUCFDC must have a Board-approved policy for resource planning, including planning horizon and periodicity of private placement.
* Offers/invitations for private placement of equity shares shall be made only to UCBs and the National Co-operative Development Corporation (NCDC).
* Offer documents must clearly state that UCBs must comply with all applicable statutory requirements and RBI instructions when applying for shares.
* NUCFDC shall not extend any loan, advance, or financial accommodation against the security of its own shares.
* Proceeds from share capital raised must be used for purposes consistent with NUCFDC's mandate.
* NUCFDC must ensure compliance with all statutory and regulatory requirements for private placement of securities.
* NUCFDC shall submit a quarterly statement to the RBI's Department of Regulation detailing equity raised, subscriber numbers, and subscription amounts within 15 days of the quarter's close.
* **Duration of Directions:** The amended directions concerning private placement remain in force from the date of issue until March 31, 2029, unless modified, withdrawn, or extended by the RBI.
**Impact Analysis**
**National Urban Co-operative Finance and Development Corporation Limited (NUCFDC)**
* **Impact:** NUCFDC is now able to offer equity shares to more than 200 persons annually on a private placement basis, facilitating its objective of granting membership to over 1400 UCBs expeditiously. It also has specific conditions to adhere to regarding its private placement activities.
* **Action Required:** Implement a Board-approved resource planning policy, ensure offers are made only to eligible entities (UCBs and NCDC), clearly communicate statutory compliance requirements in offer documents, refrain from providing financial accommodation against its own shares, use proceeds as per its mandate, ensure general regulatory compliance, and submit quarterly statements to the RBI.
**Primary (Urban) Co-operative Banks (UCBs)**
* **Impact:** UCBs will have an opportunity to subscribe to equity shares of NUCFDC on a private placement basis, which is intended to strengthen the UCB sector.
* **Action Required:** UCBs must ensure compliance with all applicable statutory requirements and RBI instructions when subscribing to NUCFDC's equity shares.
**National Co-operative Development Corporation (NCDC)**
* **Impact:** NCDC is explicitly mentioned as an eligible entity to whom NUCFDC can make offers for private placement of equity shares.
* **Action Required:** NCDC may consider subscribing to NUCFDC's equity shares based on the offer made.
Key Entities Referenced
Reserve Bank of India (Non-Banking Financial Companies – Miscellaneous) Amendment Directions, 2026: The primary policy document being issued, which amends existing directions.
Reserve Bank of India (Non-Banking Financial Companies – Miscellaneous) Directions, 2025: The existing policy document that is being amended by the new directions.
National Urban Co-operative Finance and Development Corporation Limited (NUCFDC): The entity for which the new directions are being issued, acting as an Umbrella Organisation for primary urban co-operative banks.
Reserve Bank of India Act, 1934: The foundational law under which the Reserve Bank of India derives its powers to issue these directions.
Companies Act, 2013: A law referenced for its provisions regarding private placement, which the new directions aim to provide an exception for.
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
RBI/DoR/2025-26/224
DoR.GOV.REC.No.414/18.10.008/2025-26 February 26, 2026
Reserve Bank of India (Non-Banking Financial Companies – Miscellaneous)
Amendment Directions, 2026
Please refer to the Reserve Bank of India (Non-Banking Financial Companies –
Miscellaneous) Directions, 2025.
2. The National Urban Co-operative Finance and Development Corporation Limited
(NUCFDC) has been set up with a specific purpose - to function as an Umbrella
Organisation (UO) for primary (urban) co-operative banks (UCBs) - with an
overarching mandate to strength the UCB sector by providing various kinds of fund-
based support and non-fund-based services to its member (shareholder) UCBs.
3. To achieve its objectives, it is necessary that NUCFDC grants membership to all the
1400-plus UCBs as early as possible. However, the statutory provisions contained in
Section 42(2) of the Companies Act, 2013, read with Rules 14(2) of the Companies
(Prospectus and Allotment of Securities) Rules, 2014, limits private placement offers
to 200 persons in aggregate in a financial year. This restriction would constrain the
NUCFDC from granting membership to all UCBs expeditiously. However, in terms of
sub-rule (7) of Rule 14 of the said Rules, the provisions of sub-rule (2) of Rule 14 shall
not be applicable to non-banking financial companies which are registered with the
Reserve Bank of India under the Reserve Bank of India Act, 1934 (2 of 1934), if they
are complying with regulations made by the Reserve Bank in respect of offer or
invitation to be issued on private placement basis. Therefore, in terms of the provisions
contained in Rule 14 (7) ibid, it is considered necessary to issue Directions to NUCFDC
to help fulfil its mandate.
4. Therefore, in exercise of the powers conferred by section 45L of the Reserve Bank
of India Act, 1934 (2 of 1934) and of all the powers enabling it in this regard, Reserve
Bank, being satisfied that it is necessary and expedient in the public interest so to do,
hereby issues these Directions hereinafter specified.
(1) These Directions shall be called the Reserve Bank of India (Non-Banking Financial
Companies – Miscellaneous) Amendment Directions, 2026.(2) These Directions shall come into force with immediate effect.
(3) These Directions shall modify the Reserve Bank of India (Non-Banking Financial
Companies – Miscellaneous) Directions, 2025, in the manner as specified
hereinafter.
(4) After paragraph 13 of the Reserve Bank of India (Non-Banking Financial
Companies – Miscellaneous) Directions, 2025, the following shall be inserted,
namely:
C.2 Directions on Private Placement of Equity Shares by NUCFDC (Umbrella
Organisation for Primary Co-operative Banks)
13A. National Urban Co-operative Finance and Development Corporation Limited
(NUCFDC) may make offer or invitation to subscribe to its equity shares on a private
placement basis to more than 200 persons in aggregate in a financial year, subject to
the conditions specified herein below:
(1) NUCFDC shall have a Board approved policy for resource planning which, inter
alia, covers the planning horizon and the periodicity of the private placement.
(2) Offer/invitation for the private placement of equity shares under these guidelines
shall only be made to UCBs and National Co-operative Development Corporation
(NCDC).
(3) The offer document shall clearly state that UCBs must ensure compliance with all
the applicable statutory requirements, as well as the extant instructions/directions
issued by Reserve Bank when making an application for subscribing to the equity
shares under the offer.
(4) NUCFDC shall not extend any loan or advance or any other kind of financial
accommodation against the security of its own shares.
(5) Proceeds of the share capital raised under these guidelines shall be used for the
purposes consistent with the mandate of NUCFDC as approved by Reserve Bank.
(6) Subject to the provisions of these Directions, NUCFDC shall ensure compliance
with all the applicable statutory and regulatory requirements with regard to the
private placement of securities.
(7) NUCFDC shall submit a quarterly statement containing, inter alia, the amount of
equity raised, the number and category of subscribers and the subscription
2amounts (during the quarter as well as cumulatively) to the Department of
Regulation, Reserve Bank of India, Central Office within 15 days from the close of
a quarter.
13B. The Directions contained in paragraph 13A shall remain in force from the date of
issue till March 31, 2029, unless modified or withdrawn earlier or extended further by
the Reserve Bank.
Yours faithfully
(Scenta Joy)
Chief General Manager
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