Reserve Bank of India (Non-Banking Financial Companies – Miscellaneous) Directions, 2025 (Updated as on February 26, 2026)
UR
- Applies toFinance companies
- StatusIn force
- ImportanceMUST READ
- IssuedNov 28, 2025
- Last amendedFeb 26, 2026 · 1 incorporated
- Length40 points in 5 sections · 4 min read
The four dates on this rule
- PublishedNov 28, 2025The day RBI put this document out.
- Starts to applyNot statedNot stated separately in this document. Read the rule itself before you assume a start date.
- Time to get readyNot statedCannot be worked out until the day it starts to apply is known.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
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37 of the 40 points name no product and bind every product. All products.
Numbers to remember
| ₹20,000 | Each investor must put in at least ₹20,000. RBI Para 11 |
| one year | Debentures of up to one year follow a separate RBI rule of 3 January 2024. RBI Para 13 |
| six months | Start the factoring work within six months of getting the licence. RBI Para 41 |
| 10 percent | It may raise up to 10 percent of its borrowings through short bonds and commercial paper. RBI Para 59 |
What it says
Opening paragraphs
1. One combined rulebook
This book holds RBI's mixed rules for non-banking financial companies in one place.
Chapter I. Preliminary
1. Start date
These rules took effect the day RBI placed them on its website.
2. Who is covered
These rules apply to non-banking financial companies, and which rule binds which company depends on its layer.
Chapter II. Miscellaneous instructions applicable to NBFCs in Base Layer
Must know
1. Twenty thousand a head
Each investor must put in at least ₹20,000.
BankPulse example. The minimum subscription per investor is ₹20,000. So an investor who wants to put in ₹15,000 cannot subscribe. One putting in ₹25,000 is inside the rule.
2. Short debentures elsewhere
Debentures of up to one year follow a separate RBI rule of 3 January 2024.
3. No partnership firms
A firm may not put money into a partnership, or become a partner in one.
Do it
4. Board policy for raising money
The board must set a policy on how far ahead the firm plans, and how often it places debt privately.
5. Use the common standards
A firm that gives or uses such data should follow the ReBIT standards.
6. Move away from cheques
Firms must widen the use of e-payments and drop post-dated cheques.
7. Follow the income tax limits
Firms must obey sections 269SS and 269T of the Income Tax Act on cash.
8. Due diligence continues
Firms must still run their know your customer checks.
9. Handle guarantees with care
Firms must note those cases and take care with such papers.
Background
10. Follow the auditor rules
Naming a statutory auditor follows RBI's circular of 27 April 2021.
11. Tax exempt bonds excluded
Tax free bonds these firms offer are outside this rule.
12. What an aggregator does
An account aggregator brings a customer's records from many firms into one view.
13. Limited liability counts too
A partnership firm here includes an LLP.
14. Associations of persons too
The same ban covers an association of persons, which is much the same thing.
15. Do not quote that circular
The Supreme Court set aside RBI's circular of 6 April 2018. Do not warn customers by citing it.
16. Lockers are a fee service
A safe deposit locker is a fee service. It is not financial business.
17. Beware fake guarantees
RBI has seen fake bank guarantees sent in for a check. The named branch had issued none of them.
Chapter III. Miscellaneous Instructions applicable to NBFCs in Middle Layer
1. Forex counter licence
A firm that takes no deposits may seek a licence to sell forex.
2. Watch it every month
Watch those forex services at least once a month.
3. Where to apply
Send that licence request to RBI's Foreign Exchange Department in Mumbai.
Chapter IV. Specific directions applicable to NBFC-Factors and NBFC-ICCs registered under the Factor Regulation Act, 2011
Must know
1. Start within six months
Start the factoring work within six months of getting the licence.
Do it
2. Register to factor
A firm that wants to do factoring must apply to RBI for a licence.
3. Appraise the debtor
A factor must study the debtor's credit before it signs a deal.
4. Board limit for without-recourse
Without recourse the firm takes the debtor's risk, so the board must set a limit.
5. Share borrower information
Factors and NBFCs must share news of a shared borrower. The seller counts as the borrower.
Background
6. The exposure sits with
With recourse the risk counts on the seller. Without recourse it counts on the debtor.
7. Controls before business
Set up proper checks and reports before any factoring starts.
8. Genuine trade only
Factoring may be done only on bills from real trade.
Chapter V. Specific directions applicable to Infrastructure Debt Funds – Non-Banking Financial Company (IDF-NBFCs)
Must know
1. A tenth in short paper
It may raise up to 10 percent of its borrowings through short bonds and commercial paper.
2. Borrow abroad for five years
It may also raise money abroad through external commercial borrowings.
Background
3. Trust or company
An infrastructure debt fund is set up as a trust or as a company.
4. Who regulates which
A trust fund is run under SEBI. A company fund is run under RBI.
5. Five-year bonds
Such a fund may raise money through rupee or dollar bonds of five-year maturity.
6. Ask before sponsoring
A firm may back such a mutual fund only with RBI's prior nod, on set terms.
Chapter VI. Repeal and Other Provisions
1. Old instructions repealed
The earlier directions and guidelines on these subjects stand repealed by the circular of 28 November 2025.
BankPulse example. A compliance officer keeps an old circular on the same subject in the manual. It no longer applies. The existing directions, instructions and guidelines on these areas stand repealed. Only this rulebook governs them now.
2. Earlier action stands
Anything done or begun under the repealed instructions continues to be governed by them.
BankPulse example. A show cause notice was issued under the old rules last year. The repeal does not move it. Any action taken or initiated under the repealed directions is still governed by them. The new rulebook applies to what comes after.
3. Adds to other law
These rules add to other laws, rules and directions in force; they do not take anything away from them.
BankPulse example. A bank follows these Directions and thinks the matter is closed. It is not. Any other laws, rules, regulations or directions in force still apply on top. Where another one asks for more, the bank does the more.
How this rule has changed
The points above are the rule as it stands today, after every change listed here.
Issued on Nov 28, 2025. This is the date RBI put the rule out.
Changed on Feb 26, 2026.
- Start date. These rules take effect at once from the date of issue.
- Who it applies to. These new rules change the 2025 Directions from the date they start.
- Who can subscribe. Only urban co-operative banks and National Co-operative Development Corporation can get these private equity offers.
The same subject for other kinds of institution
The same subject for other kinds of institution.
Other RBI rules for NBFCs
Every rule page on BankPulse · Questions bankers ask, answered