No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2025-26/15 · issued 01 Apr 2025 · ~1 min read
Quick answerRBI issued a consolidated Master Circular on bank finance to NBFCs, effective April 1, 2025. It updates previous instructions without new guidelines, covering prudential norms, exposure ceilings, and restrictions on certain financing activities for all scheduled commercial banks except RRBs.
What changed
This Master Circular replaces the April 24, 2024 version, consolidating all instructions on bank finance to NBFCs issued up to March 31, 2025. It does not introduce any new guidelines but serves as a single reference document for existing regulatory policies.
What it means for you
Banks must now refer to this updated circular for compliance with NBFC financing norms, including prudential exposure limits and prohibited activities. The consolidation ensures clarity but requires banks to align their internal policies with the latest consolidated instructions.
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 update internal policies on NBFC financing to align with the consolidated Master Circular.
Ensure compliance with prudential exposure ceilings and restrictions on bridge loans, advances against shares, and guarantees.
Train credit teams on the updated circular, focusing on eligible and ineligible activities for bank credit.
Monitor NBFC borrower classifications (registered vs. unregistered) to apply correct financing rules.
Who it affects
All scheduled commercial banks (excluding RRBs), Credit and risk management departments
❓ Common questions
Regulatory timeline
Stated effective dateeffective April 1, 2025
Decoded by BankPulse2026-06-18 02:09 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn03 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 Master Circular introduce new restrictions on NBFC financing?
No, it only consolidates existing instructions issued up to March 31, 2025, without adding new guidelines.
Are Housing Finance Companies (HFCs) covered under this circular?
Yes, HFCs registered under Section 29A of the National Housing Bank Act, 1987 are included in the definition of NBFCs.
What are the key prohibited activities for bank finance to NBFCs?
Prohibitions include bridge loans/interim finance, advances against collateral security of shares, and restrictions on guarantees for placement of funds with NBFCs.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #59: DOR.CRE.REC.No.05/21.04.172/2025-26 — "Master Circular - Bank Finance to Non-Banking Financial Companies (NBFCs)" dated April 1, 2025”
📜 Read the original circular — full text as issued by RBI
RBI/2025-26/15
DOR.CRE.REC.No.05/21.04.172/2025-26
April 01, 2025
All Scheduled Commercial Banks (excluding RRBs)
Madam/ Dear Sir,
Master Circular - Bank Finance to Non-Banking Financial Companies (NBFCs)
Please refer to our Master Circular DOR.CRE.REC.No.17/21.04.172/2024-25 dated April 24, 2024 on the captioned subject. Attached is the revised Master Circular, updated to reflect all instructions issued as on date on the above matter, as listed in the Annex . It may be noted that this Master Circular only consolidates all instructions on the above matter issued up to March 31, 2025 and does not contain any new instructions/guidelines.
Yours faithfully,
(Vaibhav Chaturvedi)
Chief General Manager
Encl: as above.
Master Circular on Bank Finance to Non-Banking Financial Companies (NBFCs)
Purpose
To lay down the Reserve Bank of India's regulatory policy regarding financing of NBFCs by banks.
Classification
A statutory guideline issued under Section 35A of Banking Regulation Act, 1949.
Previous guidelines
Master Circular DOR.CRE.REC.No.17/21.04.172/2024-25 dated April 24, 2024 on ‘Bank Finance to Non-Banking Financial Companies (NBFCs).
Application
To all Scheduled Commercial Banks (excluding Regional Rural Banks).
Structure
1.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2025-26/15 · issued 01 Apr 2025. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 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=12823&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.
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