Reserve Bank of India (All India Financial Institutions – Undertaking of Financial Services) Directions, 2025 (Updated as on April 27, 2026)
UR
- Applies toAll India financial institutions
- StatusIn force
- ImportanceMUST READ
- IssuedNov 28, 2025
- Last amendedApr 27, 2026 · 1 incorporated
- Length31 points in 5 sections · 3 min read
The four dates on this rule
- PublishedNov 28, 2025The day RBI put this document out.
- Starts to applyJanuary 01, 2026The day this rule starts to apply, as RBI's own text states it.
- Time to get ready34 daysThe room between the day it was published and the day it starts to apply.
- 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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What it says
Chapter I. Preliminary
1. Other business
This document sets what other business the lender may take on.
2. In force at once
The rules took effect the day they were issued. There was no grace period.
3. Who is covered
These Directions apply to every all India financial institution.
4. What financial services means
Financial services here include the businesses named in each institution's own Act.
Chapter II. General Guidelines
Do it
1. Read with exposure rules
These instructions are read together with the prudential rules on exposures.
2. Approval before investing
No investment in a subsidiary or financial services company without prior approval.
3. No Category III funds
An institution cannot invest in a Category III alternative investment fund.
4. Subsidiary limited there too
A subsidiary's holding in such a fund is limited to the market regulator's minimum.
5. Policy must cover funds
The investment policy must carry provisions on investing in such funds.
BankPulse example. A lender that has never invested in such a fund still needs the words in its investment policy. The policy must carry provisions governing its investments in a scheme of that kind. Writing them only when the first investment is proposed is too late.
6. Ten per cent alone
A lender alone cannot put more than ten per cent into an alternative investment fund.
7. Twenty per cent from all
All regulated lenders together cannot hold more than twenty per cent of a fund.
8. Subordinated units deducted
A holding in subordinated units of such a fund is deducted from capital in full.
BankPulse example. A lender puts ₹10 crore into such a fund, as subordinated units. The whole ₹10 crore comes off capital funds. It is taken proportionately from Tier-1 and Tier-2 capital.
9. Some funds are exempt
The Reserve Bank may exempt named funds from these rules by notification.
10. Apply through Pravaah
An application needing the Reserve Bank's approval goes through the Pravaah portal.
Chapter III. Financial Services
Do it
1. Inspect the subsidiary
The parent must inspect or audit its subsidiaries' books from time to time.
2. No grandchild company
A subsidiary cannot set up another company or start new business without approval.
3. What new business means
Growing in a line already permitted does not count as new business.
4. No control by stealth
A subsidiary cannot buy into a company to take control without prior approval.
5. No account access
A subsidiary cannot have online access to customers' accounts at the institution.
6. Sharing at arm's length
Information may pass between the two only on an arm's length footing.
7. No unsecured loan
No unsecured advance may be given to the subsidiary without prior approval.
8. Deals at arm's length
Every transaction between the institution and its subsidiary is at arm's length.
9. No favours to the subsidiary
A subsidiary gets no better treatment than any other party of the same risk.
10. Foreign products carry norms
Products sold by foreign branches carry the capital and exposure norms too.
11. Stricter rule abroad
An overseas branch follows whichever rule is stricter, the host's or India's.
12. Ask when unclear
Where the Indian rules say nothing about a product, guidance must be sought.
13. Indian law follows abroad
Work of foreign branches stays subject to Indian law unless the law exempts it.
Chapter IV. Repeal and Other Provisions
1. Old rules stay repealed
Rules repealed before this document was issued remain repealed.
2. Past acts still stand
Anything done under the old rules is still judged by the old rules.
3. Old approvals carry over
Approvals given under the repealed rules are now read under these rules.
4. Added to other law
These rules sit on top of every other law and rule already in force.
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 Apr 27, 2026.
- Adds new scheme. Annex I now also lists the AgriSURE agri fund for start ups and rural firms.
- Immediate effect. This amendment applies from now, without any delay.
The same subject for other kinds of institution
The same subject for other kinds of institution.
RBI financial services business rules for regional rural banks
RBI financial services business rules for rural co-operative banks
RBI financial services business rules for small finance banks
RBI financial services business rules for urban co-operative banks
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RBI credit bureau reporting rules for all India financial institutions 2025
RBI credit risk rules for all India financial institutions 2025
RBI customer service and fair conduct rules for all India financial institutions
RBI cyber security rules for all India financial institutions 2026
RBI exposure limit rules for all India financial institutions 2025
RBI financial statement and disclosure rules for all India financial institutions
RBI fraud risk rules for all India financial institutions 2026
RBI income recognition and provisioning rules for all India financial institutions
RBI investment portfolio rules for all India financial institutions 2025
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