The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Non-Operative Financial Holding Company) (Amendment) Directions, 2025, which come into effect on December 5, 2025. These amendments follow a review of earlier financial-services instructions and align the NOFHC framework with the updated, entity-wise Master Directions issued on November 28, 2025.
Key Amendments Introduced
The provisions under Paragraphs 44–47 of the Master Direction have been comprehensively revised to streamline group-level structuring of financial services within NOFHC-led banking groups.
1. Core Banking Activities to Remain Within the Bank (Para 44)
All activities permitted to a bank under Section 6(1)(a)–(o) of the Banking Regulation Act, 1949 must be undertaken strictly within the bank.
2. Specialized Financial Services Only Through Group Entities (Para 45)
The following specialised financial services cannot be undertaken by the bank and must be housed within Subsidiary / Joint Venture / Associate companies under the NOFHC:
- Mutual Fund business
- Insurance business
- Pension fund management
- Investment advisory and management services
- Portfolio management services (PMS)
- Broking services
3. No Prior Approval Needed for Certain Activities (Para 46)
NOFHCs do not require prior RBI approval for group entities undertaking the specialised activities listed above, unless the RBI specifies otherwise. However, a mandatory intimation must be made to RBI within 15 days of the Board resolution approving such businesses.
4. Prior Approval Required for Other Activities (Para 47)
- Any business activity other than those specifically listed in Para 45 requires prior RBI approval before being undertaken by an NOFHC entity.
- Additionally, NOFHC group entities cannot engage in any activity that the bank itself is not permitted to undertake under applicable law.
This establishes uniform activity restrictions across the banking group.
Link – https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13213&Mode=0
