Reserve Bank of India (Non-Banking Financial Companies – Miscellaneous) Supervisory Directions, 2026

RBI/DoS/2026-27/467 DoS.CO.PPG.61/11.01.005/2026-27 July 31, 2026

Reserve Bank of India (Non-Banking Financial Companies – Miscellaneous) Supervisory Directions, 2026

Table of Contents

Chapter I - Preliminary A. Short Title and Commencement B. Applicability C. Definitions

Chapter II - Implementation of Core Financial Services Solution

Chapter III - Fair Practices Code - Charging of Interest

Chapter IV - Nomination Facility

Chapter V - Prompt Corrective Action Framework A. Objective B. Indicators and Risk Thresholds C. Exit and Withdrawal of Restrictions D. Corrective Actions

Chapter VI - Repeal and Other Provisions A. Repeal and Saving B. Application of Other Laws Not Barred C. Interpretations

In exercise of the powers conferred under Sections 45-JA, 45-K, 45-L and 45-M of the Reserve Bank of India Act, 1934, Section 3 read with Section 6 and 31A of the Factoring Regulation Act, 2011, and Sections 29A, 30A, 31 and 32 of the National Housing Bank Act, 1987, 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 Directions hereinafter specified.

Chapter I - Preliminary

A. Short Title and Commencement

1. These Directions shall be called the Reserve Bank of India (Non-Banking Financial Companies – Miscellaneous) Supervisory Directions, 2026.

2. These Directions shall come into effect immediately upon issuance.

B. Applicability

3. These Directions shall be applicable to Non-Banking Financial Companies (hereinafter collectively referred to as ‘NBFCs’ and individually as a ‘NBFC’), for all layers, holding registration under the Reserve Bank of India Act, 1934 or the Factoring Regulation Act, 2011 and Housing Finance Companies holding registration under the National Housing Bank Act, 1987, unless specified otherwise.

Provided that Chapter III of these Directions will also be applicable to Housing Finance Companies and Micro Finance Institutions.

Provided that Chapter IV of these Directions will only be applicable to deposit taking NBFCs (NBFCs-D) excluding Housing Finance Companies.

Provided that Chapter V of these Directions will only be applicable to NBFCs-D, Non-Deposit Taking NBFCs (NBFCs-ND) in Middle, Upper and Top Layers including Investment and Credit Companies, Core Investment Companies, Infrastructure Debt Funds, Infrastructure Finance Companies, Micro Finance Institutions, and Factors but excluding (i) NBFCs not accepting / not intending to accept public funds [‘Public Funds’ defined in Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025], (ii) Primary Dealers, and (iii) Housing Finance Companies.

Note: The applicability under these Directions is in line with the regulatory structure for NBFCs as set out in Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025.

C. Definitions

4. All expressions used in these Directions, shall have the same meaning as have been assigned to them under the Reserve Bank of India Act, 1934, the Banking Regulation Act, 1949, the Companies Act, 2013, or any statutory modification or re-enactment thereto or other regulations issued by RBI or the Glossary of Terms published by RBI or as used in commercial parlance, as the case may be.

Chapter II - Implementation of Core Financial Services Solution

5. NBFCs in Upper and Middle Layers with 10 and more ‘fixed point service delivery units’ shall implement ‘Core Financial Services Solution (CFSS)’, akin to the Core Banking Solution (CBS) adopted by banks. NBFCs in Upper and Middle Layers with fewer than 10 ’Fixed point service delivery units’ and NBFCs in Base Layer may consider implementation of CFSS for their own benefit. The CFSS shall provide for seamless customer interface in digital offerings and transactions relating to products and services with anywhere / anytime facility, enable integration of NBFC’s functions, provide centralised database and accounting records, and be able to generate suitable MIS, both for internal purposes and regulatory reporting.

Explanation: For this purpose, a ‘Fixed point service delivery unit’ is a place of operation from where the business activity of non-banking financial intermediation is carried out by the NBFC, and which is manned either by its own staff or outsourced agents. It carries uniform signage with name of the NBFC and functions under administrative control of the NBFC. Administrative offices and Back offices which do not have any direct interface with customers should not be treated as a ‘Fixed point service delivery unit’.

6. The NBFC shall furnish a quarterly progress report on implementation of CFSS, to the Senior Supervisory Manager (SSM) of RBI.

Chapter III - Fair Practices Code - Charging of Interest

7. The NBFC, in the interest of fairness and transparency, shall review its practices regarding mode of disbursal of loans, application of interest and other charges, charging of Equated Monthly Instalments (EMIs), and take corrective action, including system level changes, as may be necessary, to address unfair practices, some of which are briefly explained below:

• (1) Charging of interest from the date of sanction of loan or execution of loan agreement and not from the date of actual disbursement of funds to the customer. For loans disbursed by cheque, charging interest from the cheque date while handing over the cheque to the customer several days later.
• (2) Charging of EMIs on the sanctioned loan amount rather than on the actual disbursed amount, without the knowledge or consent of the borrower.
• (3) Any changes in the amortisation schedule originally provided in the Key Facts Statement (KFS), with each part-disbursement of loan, not being communicated to the borrowers.
• (4) In case of disbursal or repayment of loans during a month, charging interest for the entire month rather than charging interest only for the period for which the loan was outstanding.
• (5) Collecting one or more instalments in advance but reckoning the full loan amount for charging interest.

8. These and other such non-standard practices of charging interest are not in consonance with the spirit of fairness and transparency while dealing with customers. These are matters of serious concern to RBI.

9. The NBFC may use online account transfers in lieu of cheques for loan disbursal.

Chapter IV - Nomination Facility

10. The NBFC-D shall obtain nomination in case of all existing and new eligible customers having deposit accounts, to avoid inconvenience and undue hardship to survivors / family members of deceased depositors, in accordance with relevant provisions of the Reserve Bank of India (Non-Banking Financial Companies - Acceptance of Public Deposits) Directions, 2025.

11. The Board of Directors / Customer Service Committee (CSC) of the Board of the NBFC-D shall review, on a periodic basis, the achievement of nomination coverage.

12. The NBFC-D shall also report the progress on nomination coverage to SSM, RBI through DAKSH portal on a quarterly basis.

13. The NBFC-D shall suitably sensitise its frontline staff in the branches for obtaining nomination as well as appropriate handling of claims of deceased constituents and dealing with nominees / legal heirs. The NBFC-D shall modify the Account Opening Forms suitably (if not already done) with provision for the customers to avail or opt out of nomination facility.

14. The NBFC-D, in addition to directly notifying the depositors, shall publicise the benefits of using the nomination facility through various media, including launching periodical drives towards achieving a full coverage of all eligible depositor accounts.

Chapter V - Prompt Corrective Action Framework

A. Objective

15. The objective of the Prompt Corrective Action (PCA) Framework is to enable Supervisory intervention at appropriate time and require the NBFC to initiate and implement remedial measures in a timely manner, so as to restore its financial health. The PCA Framework is also intended to act as a tool for effective market discipline. The PCA Framework does not preclude RBI from taking any other action as it deems fit at any time in addition to the corrective actions prescribed in the Framework.