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Master Circular on Para-Banking Activities (2008)

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2008-09/40 · issued 01 Jul 2008 · ~1 min read

Quick answerRBI consolidated all para-banking guidelines for scheduled commercial banks (excluding RRBs) as of June 30, 2008. This covers subsidiary companies, equipment leasing, hire purchase, factoring, PD business, mutual funds, insurance, pension fund management, underwriting, and smart/debit cards.

What changed

This Master Circular updates the previous July 2007 circular by incorporating all instructions issued up to June 30, 2008. It consolidates multiple earlier circulars into a single reference document for para-banking activities.

What it means for you

Banks must ensure their para-banking activities—whether done departmentally or through subsidiaries—adhere to the updated consolidated guidelines. The circular reinforces prudential norms and safeguards for activities like insurance, mutual funds, and primary dealership. It also reminds banks of separate circulars for credit card operations.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Review and align all para-banking operations with the updated Master Circular.
Ensure subsidiaries and affiliated companies comply with investment ceilings and prudential norms.
Refer to the annexes for specific guidelines on smart/debit cards, insurance agency, and pension fund management.
Maintain proper books and accounts for primary dealership and other regulated activities.

Who it affects

All scheduled commercial banks (excluding RRBs), Bank subsidiaries and affiliated companies engaged in para-banking, Bank departments handling leasing, hire purchase, factoring, PD, mutual funds, insurance, pension funds, underwriting, and card business

❓ Common questions

Regulatory timeline

Decoded by BankPulse 2026-06-19 13:27 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn 05 Aug 2026, 04:00 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

Does this circular apply to Regional Rural Banks?

No, the circular explicitly excludes RRBs from its scope.

What activities are covered under para-banking?

Activities include equipment leasing, hire purchase, factoring, primary dealership, mutual funds, insurance, pension fund management, underwriting, smart/debit cards, and money market mutual funds.

Is there a separate circular for credit card operations?

Yes, the circular mentions that a separate Master Circular has been issued on credit card operations of banks.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)

Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)

RBI’s words: “Official withdrawal register entry #2193: DBOD.No.FSD.BC.7/24.01.001/2008-09 — "Master Circular - Para-Banking Activities" dated July 1, 2008”

📜 Read the original circular — full text as issued by RBI

RBI/2008-09/40
 DBOD. No.FSD.BC. 7/ 24.01.001/ 2008-09 
 July 1, 2008
 Ashadha  10 , 1930 (Saka) 
 All  Scheduled Commercial Banks 
 (excluding RRBs) 
 Dear Sir,

 Master Circular - Para-banking Activities 
 Please refer to the Master Circular No.DBOD.FSD.BC.18/24.01.001/2007-08 dated July 2, 2007 consolidating instructions/guidelines issued to banks till June 30, 2007 on para-banking activities. The Master Circular has been suitably updated by incorporating instructions issued upto June 30, 2008. The Master Circular has also been placed on the RBI website ( http://www.rbi.org.in ). A copy of the Master Circular is enclosed. A separate Master Circular has been issued on the Credit Card Operations of banks. 
 Yours faithfully
 (P.Vijaya Bhaskar) 
 Chief General Manager 
 Table of Contents 
 Paragraph 
 No

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/40 · issued 01 Jul 2008. The plain-English explanation above is BankPulse’s own independent summary.

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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4308&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.