**Executive Summary**
This document contains Amendment Directions issued by the Reserve Bank of India (RBI) on December 05, 2025, regarding Non-Operative Financial Holding Companies (NOFHC). These directions modify the existing Master Direction on the same subject, also issued in 2025. The amendments clarify permitted and restricted activities for NOFHCs and their entities. These directions are effective immediately, as of December 05, 2025.
**Key Points / Main Content**
* **Amendment Title:** Reserve Bank of India (Non-Operative Financial Holding Company) (Amendment) Directions, 2025
* **Background:**
* The directions follow a review of earlier instructions and consultation with stakeholders.
* An earlier draft was placed on the website on October 04, 2024.
* The initial directions were issued in 2016, then replaced on November 28, 2025.
* **Modification to Master Direction:**
* Paragraphs 44-47 of the Master Direction are substituted.
* **Permitted Bank Activities:**
* Reorganization of activities within the group must adhere to the principle that 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:**
* Specialized activities like mutual fund business, insurance, pension fund management, investment advisory, portfolio management, and broking services must be conducted through a Subsidiary/Joint venture/Associate structure.
* **Prior Approval & Intimation Requirements:**
* NOFHCs do not require prior RBI approval for entities to undertake activities mentioned in paragraph 45, unless advised otherwise.
* NOFHCs must inform the RBI within 15 days of the Board's resolution to undertake such businesses.
* **Restricted Activities:**
* NOFHCs require prior RBI approval for any other business form not covered above, subject to existing instructions.
* Activities not permitted to a bank are also not permitted to entities under the NOFHC.
**Impact Analysis**
**Stakeholder: Non-Operative Financial Holding Companies (NOFHCs)**
* **Impact:** Changes in requirements for reorganizing activities within the group, conducting specialized activities, and obtaining prior approval for other business ventures.
* **Action Required:** Review internal structures to ensure compliance with the new directions, intimate the RBI within 15 days of board resolutions for certain businesses, and seek prior approval for business activities outside of the ones covered by the directions.
**Stakeholder: Reserve Bank of India (RBI)**
* **Impact:** Modification of supervisory framework for NOFHCs, increased monitoring of NOFHC activities, and review of NOFHC intimations and approval requests.
* **Action Required:** Update internal guidelines for supervising NOFHCs and monitoring their activities, and evaluate intimations and approval requests from NOFHCs.
**Stakeholder: Entities held by NOFHCs**
* **Impact:** Activities permitted to be undertaken by them and reporting requirements to NOFHC.
* **Action Required:** Inform NOFHC if they are planning to undertake any of the activities mentioned in paragraph 45 or any other activity for which the NOFHC needs to inform the RBI, or seek prior approval, respectively.
Key Entities Referenced
Reserve Bank of India (Non-Operative Financial Holding Company) (Amendment) Directions, 2025: Amendment directions issued by the Reserve Bank of India pertaining to Non-Operative Financial Holding Companies.
Reserve Bank of India Act, 1934: The Act that empowers the Reserve Bank of India.
Reserve Bank of India (Non-Operative Financial Holding Company) Directions, 2025: Referred to as 'Master Direction', which the amendment directions modify.
Banking Regulation Act, 1949: Act specifying activities a bank is permitted to carry out, referenced in the amended directions.
Reserve Bank of India: The regulator issuing 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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