Reserve Bank of India (Non-Banking Financial Companies – Microfinance Institution) Directions, 2025
RBI master-direction RBI/DOR/2025-26/371 · 28 Nov 2025
RBI master-direction RBI/DOR/2025-26/371 · 28 Nov 2025
Summary
Check the official recordThe Reserve Bank of India issues these directions to regulate Non-Banking Financial Companies – Microfinance Institutions (NBFC-MFIs). These entities must maintain at least 60 percent of their total assets as microfinance loans on an ongoing basis. NBFC-MFIs must maintain a capital adequacy ratio of at least 15 percent of aggregate risk weighted assets. The directions mandate membership in at least one Reserve Bank recognized Self-Regulatory Organization (SRO) and compliance with its code of conduct. The rules apply to all registered NBFC-MFIs. The document also specifies asset classification, provisioning norms, and governance requirements. These directions take effect on the day they appear on the Reserve Bank website.
What you must do
Key dates
Who is affected
Thresholds
Exceptions
If you do not comply
RBI/DOR/2025-26/371
DOR.FIN.REC.290/ 03-10-038/2025-26
November 28, 2025
In exercise of the powers conferred under section 45JA, 45L and 45M of Reserve Bank of India Act, 1934 (Act 2 of 1934), and of all powers enabling it in this behalf, the Reserve Bank having considered it necessary in the public interest so to do and being satisfied that, for the purpose of enabling it to regulate the financial system to the advantage of the country and to prevent the affairs of any Non-Banking Financial Company – Microfinance Institution (NBFC-MFI) from being conducted in a manner detrimental to the interest of investors or prejudicial to the interest of such NBFC-MFIs, hereby issues the Reserve Bank of India (Non-Banking Financial Companies – Microfinance Institution) Directions, 2025 hereinafter specified, for compliance of the same by every NBFC-MFI.
These Directions shall be called the Reserve Bank of India (Non-Banking Financial Companies – Microfinance Institution) Directions, 2025.
These directions shall come into effect on the day they are placed on the website of the Reserve Bank.
(1) Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025.
(2) Paragraphs 10, 11, 13, 14 and 15 of the Reserve Bank of India (Non-Banking Financial Companies – Branch Authorisation) Directions, 2025.
(3) Paragraphs 6 to 19, 23 to 33 and 50 to 57 of the Reserve Bank of India (Non-Banking Financial Companies – Undertaking of Financial Services) Directions, 2025.
(4) Reserve Bank of India (Non-Banking Financial Companies – Acquisition of Shareholding or Control) Directions, 2025 except paragraphs 6(3) and 6(4).
(5) Reserve Bank of India (Non-Banking Financial Companies – Governance) Directions, 2025.
(6) Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Directions, 2025 excluding paragraphs 6(1), 6(2) and 17.
(7) Reserve Bank of India (Non-Banking Financial Companies – Credit Risk Management) Directions, 2025.
(8) Reserve Bank of India (Non-Banking Financial Companies – Credit Facilities) Directions, 2025.
(9) Reserve Bank of India (Non-Banking Financial Companies – Concentration Risk Management) Directions, 2025.
(10) Reserve Bank of India (Non-Banking Financial Companies – Securitisation Transactions) Directions, 2025.
(11) Reserve Bank of India (Non-Banking Financial Companies – Transfer and Distribution of Credit Risk) Directions, 2025.
(12) Reserve Bank of India (Non-Banking Financial Companies – Income Recognition, Asset Classification and Provisioning) Directions, 2025.
(13) Reserve Bank of India (Non-Banking Financial Companies – Resolution of Stressed Assets) Directions, 2025.
(14) Reserve Bank of India (Non-Banking Financial Companies – Treatment of Wilful Defaulters and Large Defaulters) Directions, 2025.
(15) Reserve Bank of India (Non-Banking Financial Companies – Classification, Valuation and Operation of Investment Portfolio) Directions, 2025.
(16) Reserve Bank of India (Non-Banking Financial Companies – Asset Liability Management) Directions, 2025.
(17) Reserve Bank of India (Non-Banking Financial Companies – Managing Risks in Outsourcing) Directions, 2025.
(18) Reserve Bank of India (Non-Banking Financial Companies – Financial Statements: Presentation and Disclosures) Directions, 2025.
(19) Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Declaration of Dividends) Directions, 2025.
(20) Reserve Bank of India (Non-Banking Financial Companies – Credit Information Reporting) Directions, 2025.
(21) Reserve Bank of India (Non-Banking Financial Companies – Know Your Customer) Directions, 2025.
(22) Reserve Bank of India (Non-Banking Financial Companies – Credit Cards: Issuance and Conduct) Directions, 2025.
(23) Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Directions, 2025.
(24) Reserve Bank of India (Non-Banking Financial Companies – Voluntary Amalgamation) Directions, 2025.
(25) Chapters II and III of the Reserve Bank of India (Non-Banking Financial Companies – Miscellaneous) Directions, 2025.
The instructions contained in these Directions shall be applicable to NBFC-MFIs in addition and not in substitution to the other relevant instructions contained in the directions mentioned in paragraph 4 above.
An NBFC-MFI may make use of the ‘Guidance Note on Operational Risk Management and Operational Resilience’, as amended from time to time.
(1) “Company” means a company registered under section 3 of the Companies Act, 1956 or the corresponding provision under the Companies Act, 2013.
(2) “Microfinance loan” shall have the same meaning as given to it in Reserve Bank of India (Non-Banking Financial Companies – Credit Facilities) Directions, 2025.
(3) “NBFC-MFI” means a non-deposit taking NBFC which has a minimum of 60 percent of its total assets (netted off by intangible assets) deployed towards “microfinance loans” on an ongoing basis.
(4) “Owned Funds” shall have the same meaning as given to it in the Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Directions, 2025.
(5) "RBI Act, 1934" means the Reserve Bank of India Act, 1934 (Act 2 of 1934).
(6) “Tier 1 capital” shall have the same elements as prescribed in Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Directions, 2025.
(7) “Tier 2 capital” shall have the same elements as prescribed in Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Directions, 2025.
(1) Geographical Diversification: An NBFC-MFI shall put in place Board-approved internal exposure limits to avoid any undesirable concentration in specific geographical locations.