**Executive Summary**
This document contains the Reserve Bank of India (Non-Operative Financial Holding Company) (Amendment) Directions, 2025, effective December 05, 2025. It modifies the existing Master Direction on the same subject. The amendments concern the reorganization of activities within the group and the need for prior Reserve Bank approval for certain business activities.
**Key Points / Main Content**
* **General Principle for Reorganization:**
* All activities permitted to a bank under Section 6 (1) (a) to (o) of the Banking Regulation Act, 1949, must be carried out from the bank.
* **Specialized Activities (Subsidiary/Joint Venture/Associate Structure):**
* Specialized activities like Mutual fund business, insurance business, pension fund management, investment advisory and management services, portfolio management services and broking services shall be carried out only through Subsidiary/Joint venture/Associate structure.
* **Prior Approval Requirements:**
* An NOFHC shall not require prior approval of the Reserve Bank for the entities held by it to undertake activities mentioned under paragraph 45 above, unless advised otherwise.
* The NOFHC must inform the Reserve Bank within 15 days from the date of the board's resolution to undertake such businesses.
* An NOFHC shall require the prior approval of the Reserve Bank for the entities held by it to undertake any other form of business subject to other instructions as applicable.
* Activities not permitted to the bank are also not permitted to the group (entities under the NOFHC).
**Impact Analysis**
**Reserve Bank of India**
* **Impact**: Oversight role is modified regarding certain activities undertaken by NOFHCs and their entities.
* **Action Required**: Enforce compliance with the revised directions.
**Non-Operative Financial Holding Companies (NOFHCs)**
* **Impact**: Revised requirements for internal re-organization and undertaking certain business activities.
* **Action Required**: Ensure all activities carried out by the entities they hold are in compliance with the amended directions. The NOFHC must inform the Reserve Bank within 15 days from the date of the board's resolution to undertake activities mentioned under paragraph 45 above. Seek prior approval for any other form of business for the entities held by it.
Key Entities Referenced
Reserve Bank of India: The primary regulator and issuer of these directions.
Reserve Bank of India (Non-Operative Financial Holding Company) (Amendment) Directions, 2025: The main subject of the document, amending existing directions.
Reserve Bank of India (Non-Operative Financial Holding Company) Directions, 2025: The master direction being amended by the new directions.
Banking Regulation Act, 1949: Referenced as a source of permissible bank activities.
Reserve Bank of India Act, 1934: Cited as the source of legal authority for the directions.
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
RBI/DOR/2025-26/139
DOR.RAUG.AUT.REC.No.344/24.01.041/2025-26 December 05, 2025
Reserve Bank of India (Non-Operative Financial Holding Company) (Amendment)
Directions, 2025
Reserve Bank had earlier issued directions on Financial Services provided by Banks in
2016, since replaced by entity-wise Master Directions issued on November 28, 2025. A
review of some provisions contained in the earlier instructions was carried out and a draft
direction was placed on the website on October 04, 2024.
2. Taking into account the feedback received and consultation held with the stakeholders
and in exercise of the powers conferred by Section 45(L) and Section 45(JA) under
Chapter IIIB of the Reserve Bank of India Act, 1934 and all other laws enabling the
Reserve Bank in this regard, the Reserve Bank being satisfied that it is necessary and
expedient in the public interest to do so, hereby issues the Amendment Directions
hereinafter specified.
3. These Directions shall be called the Reserve Bank of India (Non-Operative Financial
Holding Company) (Amendment) Directions, 2025.
4. The provisions shall come into effect from December 05, 2025.
5. These Amendment Directions modify the Reserve Bank of India (Non-Operative
Financial Holding Company) Directions, 2025 (hereinafter referred to as ‘Master
Direction’) as under:
i) For paragraphs 44-47 of the Master Direction, following shall be
substituted, namely:
“44. The general principle for reorganization of the activities in the group is that
all activities permitted to a bank under Section 6 (1) (a) to (o) of Banking
Regulation Act, 1949 shall be carried out from the bank.45. However, specialized activities such as Mutual fund business, insurance
business, pension fund management, investment advisory and management
services, portfolio management services and broking services shall be carried
out only through Subsidiary/Joint venture/Associate structure;
46. An NOFHC shall not require prior approval of the Reserve Bank for the
entities held by it to undertake activities mentioned under paragraph 45 above,
unless advised otherwise. However, the NOFHC shall intimate the Reserve
Bank within 15 days from the date of resolution of the Board for undertaking
such businesses.
47. Notwithstanding the conditions above, an NOFHC shall require the prior
approval of the Reserve Bank for the entities held by it to undertake any other
form of business subject to other instructions as applicable. Further, the
activities not permitted to the bank would also not be permitted to the group
i.e. entities under the NOFHC would not be permitted to engage in activities
that the bank is not permitted to engage in.”
(Manoranjan Padhy)
Chief General Manager
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