In a move aimed at improving ease of doing business, the Reserve Bank (RBI) has introduced new rules giving more operational flexibility to non-banking financial companies for branch expansion.
The central bank has issued the Reserve Bank of India (Non-Banking Financial Companies – Branch Authorisation) Amendment Directions, 2026 to simplify procedures while maintaining regulatory oversight.
Under the revised guidelines, NBFCs are generally allowed to open branches without seeking prior approval from the RBI, unless specific restrictions apply. This change is expected to support faster expansion and smoother operations for these entities.
At the same time, certain conditions have been introduced for deposit-taking NBFCs based on their net owned funds and credit ratings.
As per the circular, deposit-taking NBFCs with net owned funds of up to ₹50 crore or a credit rating below AA can open branches or appoint agents only within the state where their registered office is located.
However, NBFCs with net owned funds above ₹50 crore and a credit rating of AA or higher are allowed to open branches or appoint agents anywhere across India.
The RBI said the objective of these changes is to balance operational ease with necessary regulatory compliance. The updated framework aims to support growth in the sector while ensuring financial stability.
The move reflects a policy shift toward enabling business expansion while keeping safeguards in place for deposit-taking entities.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream LinkedIn | The Mainstream Facebook | The Mainstream Youtube | The Mainstream Twitter
About us:
The Mainstream is a premier platform delivering the latest updates and informed perspectives across the technology business and cyber landscape. Built on research-driven, thought leadership and original intellectual property, The Mainstream also curates summits & conferences that convene decision makers to explore how technology reshapes industries and leadership. With a growing presence in India and globally across the Middle East, Africa, ASEAN, the USA, the UK and Australia, The Mainstream carries a vision to bring the latest happenings and insights to 8.2 billion people and to place technology at the centre of conversation for leaders navigating the future.
