All India Financial Institutions Undertaking of Financial Services Directions

RBI/DOR/2025-26/320
DOR.AUT.REC.No.239/24-01-041/2025-26

November 28, 2025

Previous Versions

Reserve Bank of India (All India Financial Institutions – Undertaking of Financial Services) Directions, 2025 (Updated as on April 27, 2026)

Table of Contents

Chapter I – Preliminary
A. Short Title and Commencement
B. Applicability
C. Definitions
Chapter II – General Guidelines
A. Prudential Regulation for Investments
B. Procedure for Application
Chapter III – Financial Services
A. Relationship with subsidiaries
B. Operations of subsidiaries and branches in foreign jurisdictions and in International Financial Services Centers (IFSCs)
Chapter IV – Repeal and Other Provisions
A. Repeal and saving
B. Application of other laws not barred
C. Interpretations
Annex I

In exercise of the powers conferred by Section 45L of the Reserve Bank of India Act, 1934, and all other provisions / laws enabling the Reserve Bank of India (‘RBI’) in this regard, RBI being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Directions hereinafter specified.

Chapter I – Preliminary

A. Short Title and Commencement

1. These Directions shall be called the Reserve Bank of India (All India Financial Institutions – Undertaking of Financial Services) Directions, 2025.

2. ^1 These Directions shall come into force with immediate effect.

B. Applicability

3. These Directions shall be applicable to All-India Financial Institutions (hereinafter collectively referred to as ‘AIFIs’ and individually as ‘an AIFI’) viz. Export Import Bank of India (‘EXIM Bank’), National Bank for Agriculture and Rural Development (‘NABARD’), Small Industries Development Bank of India (‘SIDBI’), National Housing Bank (‘NHB’) and National Bank for Financing Infrastructure and Development (‘NaBFID’).

C. Definitions

4. In these directions, unless the context otherwise requires, the terms herein shall bear the meanings assigned to them below:

(1) ‘Debtor company’ means any company to which the regulated entity (RE) currently has or previously had a loan or investment exposure (excluding equity instruments) anytime during the preceding twelve months;

(2) ‘Equity instrument’ means equity shares, compulsorily convertible preference shares (CCPS) and compulsorily convertible debentures (CCD);

(3) ‘Capital funds’ means the total regulatory capital of an AIFI, fulfilling the criteria defined in the Reserve Bank of India (All India Financial Institutions – Prudential Norms on Capital Adequacy) Directions, 2025, as per the last audited balance sheet;

(4) ‘Control’ shall have the same meaning as assigned to it under clause (27) of Section 2 of the Companies Act, 2013 as amended from time to time;

(5) ‘Financial services company’ means a company engaged in the 'business of financial services’.

Explanation: The ‘business of financial services’ shall include –

(i) the financial businesses enumerated in the respective Statutory Acts of the AIFIs.

(ii) the forms of business enumerated in clauses (a), (c), (d), (e) of sub-section (1) of section 6 of the Banking Regulation Act, 1949 and notified under clause (o) of sub-section (1) of section 6 of the Banking Regulation Act, 1949;

(iii) the forms of business enumerated in clause (c) and clause (f) of Section 45 I of Reserve Bank of India Act, 1934;

(iv) business of credit information as provided under the Credit Information Companies (Regulation) Act, 2005;

(v) operation of a payment system as defined under the Payment and Settlement Systems Act, 2007;

(vi) operation of a stock exchange, commodity exchange, derivatives exchange or other exchange of similar nature;

(vii) operation of a depository as provided under the Depositories Act, 1996;

(viii) business of an asset reconstruction company as provided under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;

(ix) business of a merchant banker, portfolio manager, stock broker, sub-broker, share transfer agent, trustee of trust deeds, registrar to an issue, merchant banker, underwriter, debenture trustee, investment adviser and such other intermediary as provided in the Securities and Exchange Board of India Act, 1992 and the regulations made thereunder;

(x) business of a credit rating agency as defined in the Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999;

(xi) business of a collective investment scheme as defined under the Securities and Exchange Board of India Act, 1992;

(xii) business of managing a pension fund;

(xiii) business of an authorised person as defined under the Foreign Exchange Management Act, 1999; and

(xiv) such other business as may be specified by RBI from time to time.

(6) ‘Non-Financial Services Company’ means a company engaged in businesses other than those specified in clause (5) above; and

(7) ‘Subsidiary’ shall have the same meaning as assigned under the extant Accounting Standards.

5. All other expressions unless defined herein shall have the same meaning as have been assigned to them under the Banking Regulation Act, 1949 or the Reserve Bank of India Act, 1934, or any statutory modification or re-enactment thereto, or Glossary of Terms published by RBI or as used in commercial parlance, as the case may be.

Chapter II – General Guidelines

6. The following instructions shall be read with the extant prudential norms on Exposures for the AIFIs.

A. Prudential Regulation for Investments

7. AIFIs shall formulate policies, with the approval of their Board, covering the following aspects of investments in financial entities to the extent these are not covered under the cross-holding limits prescribed under the Large Exposure Norms, under Reserve Bank of India (All India Financial Institutions - Concentration Risk Management) Directions, 2025.

A.1 Limits on investments

8. AIFIs shall adhere to the following limits in terms of percentage of the paid-up capital and reserves of the AIFI as per the last audited balance sheet or a subsequent balance sheet, whichever is lower,

(1) Investment in equity of a single financial services entity which is not an affiliate of the AIFI;

(2) Aggregate investment in equity of all financial services entities which are not affiliates of the AIFI;

(3) Aggregate investment in equity of all financial services entities including the affiliates of the AIFI;

(4) The aggregate of equity investment in factoring subsidiaries and factoring companies;

(5) Investment in equity of a single deposit taking NBFC; and

(6) Equity / Units of an Alternative Investment Fund (AIF) (other than Category III AIF) subject to the same being permitted under the statutory provisions contained in the respective AIFI’s Act.

A.2 Requirement for regulatory approval

9. No AIFI shall, without the prior approval of the RBI, make:

(1) Investment in a subsidiary and a financial services company that is not a subsidiary.

Provided that, such prior approval shall not be necessary in the following circumstances:

(i) The investment is in a company engaged in financial services;

(ii) The AIFI has minimum prescribed capital and has also made a net profit in the immediate preceding financial year;

(iii) The shareholding of the AIFI including the proposed investment is less than 10 percent of the investee company’s paid up capital; and

(iv) The aggregate shareholding of the AIFI along with shareholdings, if any, by its subsidiaries or joint ventures or other entities directly or indirectly controlled is less than 20 percent of the investee company’s paid up capital.

Explanation: Prior approval of the RBI shall not be required if the investments in the financial services companies are held under the “Held for Trading” category as stipulated in the Reserve Bank of India (All India Financial Institutions - Classification, Valuation and Operation of Investment Portfolio) Directions, 2025, as updated from time to time.