RBI master-direction RBI/DoR/2025-26/372 · 28 Nov 2025
Official title
Reserve Bank of India (Non-Operative Financial Holding Companies) Directions, 2025 (Updated as on December 05, 2025)
Summary
Check the official recordThe Reserve Bank of India (RBI) establishes a regulatory framework for Non-Operative Financial Holding Companies (NOFHC). An NOFHC is a non-deposit taking NBFC that holds shares of a banking company and other financial services entities within a group. The NOFHC must register with the RBI and maintain a base layer regulatory structure. Promoters must own at least 51 percent of the NOFHC's paid-up equity capital. The NOFHC must ring-fence regulated financial entities from non-regulated commercial activities. The directions mandate specific corporate governance standards, including board composition and independent director requirements. The NOFHC must adhere to prudential norms on a stand-alone and consolidated basis, including capital adequacy, liquidity management, and exposure limits. These directions take effect immediately.
What you must do
Key dates
Who is affected
Thresholds
Exceptions
If you do not comply
RBI/DoR/2025-26/372 DoR.LIC.REC.No.291/16.13.218/2025-26 November 28, 2025
Previous Versions Reserve Bank of India (Non-Operative Financial Holding Company) Directions, 2025 (Updated as on December 05, 2025)
Chapter-I Preliminary A. Short Title and Commencement B. Applicability C. Definitions
Chapter-II Registration, Regulatory Structure and Shareholding A. Registration B. Regulatory Structure C. Shareholding
Chapter-III Corporate Governance of NOFHC
Chapter-IV Prudential Norms for the NOFHC A. NOFHC on a stand-alone basis B. NOFHC on a consolidated basis C. Exposure Norms C.1 Exposure Norms for stand-alone NOFHC C.2 Exposure Norms for consolidated NOFHC C.3 Exposure norms for the bank held by the NOFHC C.4 Exposure norms for the financial entities (other than bank) held by the NOFHC
Chapter-V Non-Permitted Activities of an NOFHC
Chapter-VI Consolidated Supervision
Chapter-VII Repeal and Other Provisions A. Repeal and Saving B. Application of other laws not barred C. Interpretations D. Exemptions
In exercise of the powers conferred by Section 45JA of the Reserve Bank of India Act, 1934, and all the powers enabling Reserve Bank on this behalf, the 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
These Directions shall be called the Reserve Bank of India (Non-Operative Financial Holding Company) Directions, 2025.
These Directions shall come into effect with immediate effect.
B. Applicability
C. Definitions
(1) ‘Consolidated capital funds’ means the Capital, Reserves and Surplus of the NOFHC determined on the consolidation of its subsidiaries, associates and joint ventures in accordance with the applicable Accounting Standards.
(2) ‘Non-Operative Financial Holding Company (NOFHC)’ means a non-deposit taking NBFC, which holds the shares of a banking company and the shares of all other financial services companies in its group, whether regulated by the Reserve Bank or by any other financial regulator, to the extent permissible under the applicable regulatory prescriptions.
(3) ‘Promoter’ means the person who together with his relatives [as defined in Section 2 (77) of the Companies Act, 2013 and Rules made there under], by virtue of his ownership of voting equity shares, will be/ is in effective control of the bank / NOFHC, and includes, wherever applicable, all entities which form part of the Promoter Group. Explanation: The term ‘effective control’ means any arrangement whether in the form of shareholding or agreement or otherwise, which enables exercise of control.
(4) ‘Promoting entity’ means the entity that promotes the bank.
(5) ‘Promoter Group’ includes: (i) the promoter; (ii) relatives of the promoter [as defined in Section 2 (77) of the Companies Act, 2013 and Rules made there under]; and (iii) in case promoter is a body corporate: (a) a subsidiary or holding company of such body corporate; (b) any body corporate in which the promoter holds ten per cent or more of the equity share capital or which holds ten per cent or more of the equity share capital of the promoter; (c) any body corporate in which a group of individuals or companies or combinations thereof which hold twenty per cent or more of the equity share capital in that body corporate also holds twenty per cent or more of the equity share capital of the promoter; (d) Joint venture/Associate (as defined in terms of InD AS 28) with the promoter; (e) Related party (as defined in terms of InD AS 24) of the promoter; and (iv) in case the promoter is an individual: (a) any body corporate in which ten per cent or more of the equity share capital is held by the promoter or a relative of the promoter or a firm or Hindu Undivided Family in which the promoter or any one or more of his immediate relative is a member; (b) any body corporate in which a body corporate as provided in (4) (i) above holds ten per cent or more, of the equity share capital; (c) any Hindu Undivided Family or firm in which the aggregate shareholding of the promoter and his immediate relatives is equal to or more than ten per cent of the total; and (v) all persons who are declared as promoters in the Articles of Association of the bank/ group companies. (vi) all persons whose shareholding is aggregated for the purpose of disclosing in the prospectus (As per SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2018) under the heading "shareholding of the promoter group"; (vii) Entities sharing a common brand name with entities discussed in (iii) (a), (iii) (b), (iii) (c), (iii) (d), (iii) (e), where the promoter is a body corporate and (iv) (a), (iv) (b), (iv) (c) where the promoter is an individual; Provided that a financial institution, scheduled commercial bank, foreign institutional investor or mutual fund shall not be deemed to be promoter group merely by virtue of the fact that ten per cent or more of the equity share capital of the promoter is held by such institution unless such investment is strategic in nature.
Chapter-II Registration, Regulatory Structure and Shareholding
A. Registration
The NOFHC shall be registered with RBI as a non-banking financial company (NBFC).
A company seeking registration as an NOFHC shall first have received an in-principle approval for setting up a bank from the Reserve Bank. The application for registration of NOFHC shall be made with the requisite information and documents through PRAVAAH portal to Department of Regulation, Reserve Bank of India. The Certificate of registration for the NOFHC will be issued by Department of Regulation, Reserve Bank of India.
B. Regulatory Structure
The NOFHC will always remain in the Base Layer of the regulatory structure, as defined in Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025.
Not less than 51 per cent of the total paid-up equity capital of the NOFHC shall be owned by the Promoter / Promoter Group.
The NOFHC shall hold the bank as well as all the other financial services entities of the Group regulated by RBI or other financial sector regulators. The objective is that the Holding Company should ring fence the regulated financial services entities of the Group, including the bank, from other activities of the Group i.e. commercial, and financial activities not regulated by financial sector regulators and also that the bank should be ring fenced from other regulated financial activities of the Group.
Only those regulated financial sector entities in which the individual Promoter /s / group have significant influence or control will be held under the NOFHC. Explanation: The significant influence or control would mean as defined under Accounting Standards Ind AS 110 and Ind AS 28.
The financial services entities whose shares are held by the NOFHC cannot be shareholders of the NOFHC. The financial entities held by the NOFHC will be governed by the applicable statutes and regulations prescribed by the respective financial sector regulators.
C. Shareholding
The capital structure of the NOFHC set up by Promoter / Promoter Group shall be as under: (1) The shareholding of the Promoter / Promoter Group in the NOFHC shall be only through individuals, non-financial services entities and Core Investment Companies in the Group. Consequently, no financial services entity in the promoter group, other than those specified above, shall be eligible to be a shareholder in the NOFHC. (2) Not less than 51 per cent of the total voting equity shares of the NOFHC shall be held by promoter/s / companies forming part of the Promoter Group. In case the shareholding is by companies of the promoter group, such companies shall preferably have a diversified shareholding. (3) In case 51 per cent or more of promoter group shareholding in the NOFHC is held by individuals belonging to the Promoter Group, shareholding by each of such individual, along with his relatives [as defined in Section 2 (77) of the Companies Act, 2013 and Rules made there under] and along with entities in which he and / or his relatives hold 50 per cent or more of the voting equity shares, shall not exceed 15 per cent of the total paid-up equity capital of the NOFHC per such individual. Not more than 49 per cent of the total voting equity shares of the NOFHC could be held by the non-promoters. However, shareholding by a single individual, who is not a promoter, along with his relatives [as defined in Section 2 (77) of the Companies Act, 2013 and Rules made there under] and along with entities in which he and / or his relatives hold 50 per cent or more of the voting equity shares, shall not be more than 10 per cent of the total shareholding of the NOFHC. (4) No shareholder, other than the promoters / promoter group, shall have significant influence and control in the NOFHC. Explanation: Significant Influence and Control would mean as defined under Accounting Standards Ind AS 110 and Ind AS 28 (5) An LLP or trust cannot hold voting equity shares directly in the NOFHC but can hold indirectly through a company in the Promoter Group which holds voting equity shares of the NOFHC. (6) A non-operating holding company that holds investments in unregulated financial sector entities and non-financial sector entities will be eligible to hold voting equity shares in the NOFHC. It will be required to be registered as a CIC or NBFC with RBI if it meets the stipulated criteria.
Any change in shareholding within the NOFHC, as a result of which a shareholder transfers / acquires five per cent or more of its total equity capital, from the date of grant of in-principle approval, shall be reported to RBI.
The Promoters / Promoter Group entities / individuals associated with Promoter Group shall hold equity investment in the bank and other regulated financial entities in the group only through the NOFHC.
Non-voting capital shall not be reckoned for the purpose of calculation of promoter shareholding in the NOFHC/ bank. However, non-voting equity shares are subject to relevant laws/ SEBI guidelines. The non-voting capital in the NOFHC will be counted towards meeting prudential norms if it meets the eligibility criteria for inclusion in the regulatory capital as laid down in the Reserve Bank of India (Commercial Banks – Prudential Norms on Capital Adequacy) Directions, 2025.
An existing non-operating listed holding company will be eligible to promote a NOFHC/ hold shares in NOFHC, subject to the above directions.
