Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025 (Updated as on July 01, 2026)

1. Date of issue

The original Directions were issued on November 28, 2025, alongside RBI's wider NBFC rule clean-up.

2. Purpose

This paper says what an NBFC is and how closely RBI keeps watch on each one.

1. Start date

These Directions took effect the day they were placed on RBI's official website.

2. Who is covered

These Directions apply to all Non-Banking Financial Companies registered with the Reserve Bank of India.

3. Government companies included

Even an NBFC that is a government company under the Companies Act must follow these rules.

4. Linked Master Directions

An NBFC must also follow the other Master Directions listed here.

1. Four-layer system

NBFCs are sorted into four layers based on their size, activity and how risky they are.

2. Base Layer definition

The Base Layer covers small non-deposit NBFCs below Rs 1,000 crore in assets, plus a few fixed categories.

3. Middle Layer definition

The Middle Layer includes every deposit-taking NBFC, regardless of size, plus larger non-deposit NBFCs.

4. Top Layer definition

The Top Layer is meant to stay empty, filling up only if systemic risk rises sharply.

5. Group assets combined

Assets of NBFCs under common promoters are combined to decide their Middle Layer classification.

6. Yearly auditor certificate

Statutory Auditors must certify each NBFC group's combined asset size every year, based on March 31 figures.

7. Crossing Rs 1,000 crore

Once an NBFC crosses Rs 1,000 crore in assets, Middle Layer rules apply from then on.

8. Upper Layer definition

The Upper Layer holds NBFCs with Rs 1,00,000 crore or more in assets, per the latest audited balance sheet.

BankPulse example. An NBFC's latest audited balance sheet shows assets of Rs 1,20,000 crore. That is above Rs 1,00,000 crore, so it sits in the Upper Layer. One with Rs 80,000 crore of assets does not.

9. Upper Layer Board plan

The Board must approve a policy and implementation plan within three months of Upper Layer classification.

10. 24-month adjustment window

A newly classified Upper Layer NBFC gets up to twenty-four months to meet the tougher rules.

11. Five-year Upper Layer stay

Once classified Upper Layer, an NBFC stays under stricter rules for at least five years.

12. Three-yearly threshold review

The Upper Layer size limit must be looked at every three years.

13. Layer tracking duty

Compliance teams must track their NBFC's layer, since higher layers automatically add more rules.

14. Stricter rules higher up

Rules get stricter as an NBFC moves up from the Base to the Upper Layer.

15. Top Layer consequences

Any NBFC pushed into the Top Layer faces a higher capital charge and closer supervision.

1. Deregistration window

Existing NBFCs that take no public funds and have no customer interface may apply for deregistration by December 31, 2026.

2. Voluntary deregistration

NBFCs with no public funds, no customer interface and assets under Rs 1,000 crore may apply to deregister.

3. Auditor breach reporting

Statutory Auditors must report to RBI if an exempt NBFC breaches its public-fund or customer-interface conditions.

4. Rs 10 crore fund floor

Investment, credit, microfinance and factoring NBFCs need Rs 10 crore in net owned funds.

5. Rs 2 crore fund floor

Peer-to-peer lending and account aggregator NBFCs need only Rs 2 crore in net owned funds.

6. Rs 300 crore fund floor

Infrastructure finance NBFCs and infrastructure debt funds must hold net owned funds of Rs 300 crore.

7. Glide path to 2027

A step by step path is set for the finance companies already in business.

8. Registration at risk

NBFCs that fail to reach the required net owned funds in time cannot keep their registration.

9. Weak-jurisdiction investor cap

Fresh investors from weak anti-money-laundering jurisdictions cannot cross twenty percent voting power in an NBFC.

1. Nidhi and chit exemption

Nidhi companies and chit fund companies are left out of these rules.

2. Exempt institutions

Insurance companies, stock exchanges and registered stockbrokers are exempt if they don't take public deposits.

3. Escape from registration

Very small, no-public-fund NBFCs can escape RBI registration entirely if they meet strict conditions.

1. Supervision reporting

Every NBFC must follow the reporting requirements set by RBI's Department of Supervision.

1. Older rules repealed

This paper cancels the older RBI rules on NBFC registration and layers.

2. Old actions preserved

Anything already done under the repealed rules stays governed by those old provisions.

3. July 2026 amendment

Several clauses were inserted or changed with effect from July 1, 2026, by an amendment.