**Executive Summary**
This document presents the Reserve Bank of India (Non-Operative Financial Holding Company) (Amendment) Directions, 2025. These directions, effective from December 05, 2025, modify the Reserve Bank of India (Non-Operative Financial Holding Company) Directions, 2025 (Master Direction). They concern the reorganization of activities within NOFHC groups, specifying which activities must be carried out by the bank and detailing approval requirements for activities undertaken by NOFHC-held entities.
**Key Points / Main Content**
* **Amendment Title:** Reserve Bank of India (Non-Operative Financial Holding Company) (Amendment) Directions, 2025.
* **Effective Date:** December 05, 2025.
* **Modification:** These Directions modify the Reserve Bank of India (Non-Operative Financial Holding Company) Directions, 2025 (Master Direction).
* **Reorganization of Activities:**
* The general principle for reorganization is that all activities permitted to a bank under Section 6 (1) (a) to (o) of Banking Regulation Act, 1949, must be carried out from the bank.
* 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 specialized activities. However, the NOFHC shall intimate the Reserve Bank within 15 days from the date of resolution of the Board for undertaking such businesses.
* An NOFHC requires prior approval from the Reserve Bank for its entities 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.
**Impact Analysis**
**Stakeholder:** Non-Operative Financial Holding Companies (NOFHCs)
**Impact:**
The amendment changes the rules around which activities must be carried out by the bank itself versus other entities within the NOFHC group. It also clarifies when prior approval from the Reserve Bank is needed for activities undertaken by NOFHC-held entities.
**Action Required:**
NOFHCs must review their current structure and planned activities to ensure compliance with the new directions. NOFHCs should notify the Reserve Bank for undertaking specialized activities within 15 days from the date of resolution of the Board. They should also seek prior approval for any activities that are not specialized and are not otherwise permitted.
Key Entities Referenced
Reserve Bank of India (Non-Operative Financial Holding Company) Directions, 2025: The primary directions being amended by this document.
Reserve Bank of India Act, 1934: The governing legislation that empowers the Reserve Bank of India, specifically Chapter IIIB and Sections 45(L) and 45(JA).
Reserve Bank of India: The regulator issuing the directions and empowered by the RBI Act.
Banking Regulation Act, 1949: Refers to Section 6 which details the permissible activities of a bank.
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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