The Reserve Bank of India (RBI) on Wednesday provided operational flexibility to non-banking financial companies (NBFCs) by allowing them to open branches without prior approval in most cases, while imposing certain conditions for deposit-taking entities based on net owned funds, according to Moneycontrol.
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Business with ease
The central bank has reportedly issued the Reserve Bank of India (Non-Banking Financial Companies – Branch Authorisation) Amendment Directions, 2026.
The objective of these amendment directions is to provide operational flexibility to NBFCs for branch expansion, facilitate ease of doing business, and ensure necessary regulatory compliance, it said in a circular.
An AA or above rating for new branch opening
RBI said, “An NBFC is generally permitted to open branches without having the need to obtain prior approval from RBI, unless otherwise specifically restricted.”
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The circular further said a deposit-taking NBFC having NOF of up to Rs 50 crore or a credit rating below AA may open a branch or appoint agents within the state where its registered office is situated. If the NOF of such an NBFC is more than Rs 50 crore and the credit rating is AA or above, then it may open a branch or appoint agents anywhere in India.