The Reserve Bank of India (RBI) has taken a significant step towards risk-based regulation with the release of the Draft- Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Amendment Directions, 2026 on 10 February 2026.
Under the draft amendment, NBFCs not availing public funds and not having any customer interface, commonly referred to as Type I NBFCs, with an asset size below INR 1,000 crore are proposed to be exempted from mandatory registration under Section 45IA of the RBI Act, 1934, effective April 1, 2026 and would be classified as ‘Unregistered Type I NBFCs’.
Key highlights:
- Existing eligible NBFCs may apply for deregistration within six months (up to September 30, 2026) through the PRAVAAH portal, along with the prescribed documents.
- NBFCs crossing the INR 1,000 crore asset size shall obtain registration as ‘Type I NBFC’.
- NBFCs intending to access public funds/customer interface shall take registration as ‘Type II NBFC’.
- An Unregistered Type I NBFC intending to undertake overseas investment in the financial services sector must obtain RBI registration and will be regulated as a ‘Type I NBFC’ holding a CoR, including compliance with the requirements under the RBI (NBFCs – Undertaking of Financial Services) Directions, 2025.
- Despite exemption from registration, these NBFCs would continue to be subject to other provisions of Chapter IIIB of the RBI Act, 1934.
- Indirect receipt of public funds now includes funds received through associates and group entities which have access to public funds.
The draft directions signal RBI’s shift towards proportional regulation, reducing compliance burdens for low-risk, non-public-fund, non-customer-facing NBFCs while tightening oversight where systemic risk exists. This development is relevant for investment holding structures and family offices operating through NBFC platforms.
Source: https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=62200
Leave A Comment