**Executive Summary**
This document contains the Reserve Bank of India (Non-Operative Financial Holding Company) (Amendment) Directions, 2025. These directions, effective December 05, 2025, modify the Reserve Bank of India (Non-Operative Financial Holding Company) Directions, 2025 (Master Direction). This document includes the substitution of paragraphs 44-47 of the Master Direction, clarifying the reorganization of activities within the group and prior approval requirements for NOFHCs.
**Key Points / Main Content**
* **Amendment Overview**: These directions modify the existing Reserve Bank of India (Non-Operative Financial Holding Company) Directions, 2025.
* **Effective Date**: The provisions of these directions come into effect from December 05, 2025.
* **Modification of Master Direction**:
* Paragraphs 44-47 of the Master Direction are substituted.
* **Permitted Bank Activities**: Reorganization of activities within the group should ensure that all activities permitted to a bank under Section 6 (1) (a) to (o) of the Banking Regulation Act, 1949, are carried out from the bank.
* **Specialized Activities**: Specialized activities like mutual fund business, insurance business, pension fund management, investment advisory, portfolio management, and broking services must be conducted through a Subsidiary/Joint Venture/Associate structure.
* **Prior Approval Exemption**: NOFHCs do not need prior Reserve Bank approval for activities listed in paragraph 45, unless advised otherwise, but must inform the Reserve Bank within 15 days of the board's resolution to undertake such activities.
* **Prior Approval Required**: NOFHCs must obtain prior Reserve Bank approval for any other business form.
* **Prohibited Activities**: Activities not permitted to the bank are also not permitted to entities under the NOFHC.
**Impact Analysis**
**Stakeholder: Non-Operative Financial Holding Companies (NOFHCs)**
**Impact:**
* NOFHCs now have updated guidelines regarding the reorganization of activities within their groups.
* Clarification is provided on the activities that can be undertaken without prior approval and those requiring it.
* There is a new requirement to inform the Reserve Bank within 15 days of certain board resolutions.
**Action Required:**
* NOFHCs need to review their existing structure and activities to ensure compliance with the amended directions.
* They must establish a process for informing the Reserve Bank of board resolutions related to activities mentioned in paragraph 45.
* They must seek prior approval for activities that are not already permitted.
Key Entities Referenced
Reserve Bank of India (Non-Operative Financial Holding Company) (Amendment) Directions, 2025: The primary subject of the document, detailing amendments to directions related to Non-Operative Financial Holding Companies (NOFHC).
Reserve Bank of India: The issuer and regulator, responsible for issuing the directions and overseeing the implementation.
Reserve Bank of India Act, 1934: The Act that empowers the Reserve Bank of India to issue these directions.
Banking Regulation Act, 1949: Specifies the activities permitted to a bank under Section 6 (1) (a) to (o).
Reserve Bank of India (Non-Operative Financial Holding Company) Directions, 2025: The 'Master Direction' being amended by the current amendment 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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