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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

RBI updates RBI (Commercial Banks - Undertaking of Financial Services) Directions, 2025

05-Dec-2025 | RBI/DOR/2025-26/148 DOR.AUT.REC.No.67/24-01-041/2025-26

RBI has updated RBI (Commercial Banks - Undertaking of Financial Services) Directions, 2025. Key Highlights: 1. Key definitions are updated such as agency business, group entity, and referral services to clearly specify what banks and their group entities can or cannot do. 2. RBI has set clearer rules on which activities banks must do departmentally, and which must be done only through group entities (e.g., mutual funds, insurance, PMS, broking). 3. Banks and their group entities (including NBFCs/HFCs) must follow additional conditions when undertaking lending, including applying NBFC-UL norms and complying with credit restrictions applicable to banks. 4. Detailed investment limits are prescribed such as caps on equity investments, AIF investments, REIT/InvIT exposure, and conditions for investments above certain thresholds (with or without RBI approval). 5. Banks must follow stricter reporting, capital allocation, and risk management requirements, including ICAAP (Internal Capital Adequacy Assessment Process) adjustments and timely reporting of any limit breaches. 6. Any breach of the limits under this Master Direction must be reported to the Reserve Bank's Department of Regulation through the PRAVAAH portal within 15 days of the breach, along with the reason for the breach and the plan to fix it. For more information, please refer to the attached document.

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