RBI amends NBFC branch rules with NOF and rating gates
Deposit-taking NBFCs must meet NOF and AA gates before India-wide expansion
Change
India's RBI amended NBFC branch authorisation rules, gating deposit-taking NBFC expansion on net owned funds and credit-rating thresholds, effective immediately.
Why it matters
Deposit-taking NBFCs with NOF up to ₹50 crore can open branches only in their home state. India-wide expansion now requires NOF above ₹50 crore plus an AA-or-above credit rating.
Implications
- — Branch-expansion teams must block out-of-state openings unless NOF exceeds Rs 50 crore and rating is AA-or-above - non-compliant expansion breaches RBI directions.
- — Legal and compliance teams must update branch-approval policies now - missing NOF and rating gates create regulatory non-compliance exposure.
- — Deposit-taking HFC teams must apply the same branch threshold rules - public-deposit eligibility keeps them inside the amended scope.
Who is affected
- — Branch-expansion teams at deposit-taking NBFCs
- — Legal and compliance teams at deposit-taking NBFCs
- — Branch-planning teams at deposit-taking HFCs
What to watch
- — Amendment Directions came into force immediately