Updates

The Reserve Bank of India’s Master Direction on Prudential Norms on Capital Adequacy for Regional Rural Banks (RRBs), effective from April 1, 2025, mandates RRBs to maintain a minimum Capital to Risk Weighted Assets Ratio (CRAR) of 9%, detailing the composition and limits of Tier 1 and Tier 2 capital. It also outlines the methodology for computing risk-weighted assets and stipulates annual reporting requirements to ensure financial stability and compliance.

The “Master Directions – Reserve Bank of India (Priority Sector Lending – Targets and Classification) Directions, 2025” outline the updated guidelines for banks to ensure adequate credit flow to priority sectors like agriculture, MSMEs, and weaker sections. These directions define lending targets and sub-targets to promote inclusive economic development.

The Master Direction – Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016 (updated as on February 27, 2025) provides a comprehensive regulatory framework for NBFCs accepting public deposits. These directions outline eligibility criteria, prudential norms, and reporting requirements to ensure financial stability and protect depositor interests

The Master Direction – Reserve Bank of India (Prudential Regulations on Basel III Capital Framework, Exposure Norms, Significant Investments, Classification, Valuation and Operation of Investment Portfolio Norms and Resource Raising Norms for All India Financial Institutions) Directions, 2023 (updated as on February 17, 2025) provides a comprehensive regulatory framework for All India Financial Institutions (AIFIs), aligning them with global Basel III standards. This update introduces key amendments, including the exclusion of certain long-term investments from the Held to Maturity (HTM) category ceiling, thereby enhancing the flexibility and efficiency of AIFIs in managing their investment portfolios .

​The Reserve Bank of India (RBI) issued the “Master Direction – Access Criteria for NDS-OM” on February 7, 2025, updating the guidelines for accessing the Negotiated Dealing System – Order Matching (NDS-OM) platform. The new directions, effective immediately, supersede the 2024 guidelines and introduce provisions for SEBI-registered non-bank brokers to facilitate retail investor participation in government securities trading.

​The Reserve Bank of India’s Master Direction on Credit Information Reporting (2025) establishes a standardized framework for the reporting and dissemination of credit information, ensuring data quality, consumer rights, and grievance redressal mechanisms. It mandates Credit Information Companies (CICs) and Credit Institutions (CIs) to adhere to uniform reporting formats, maintain data accuracy through Data Quality Indexes, provide consumers with access to their credit reports, and implement compensation mechanisms for delays in rectifying credit information.​

​The Reserve Bank of India’s Master Direction on Non-resident Investment in Debt Instruments (2025) consolidates guidelines for foreign investments in Indian debt markets, detailing permissible routes, instruments, and limits. It aims to streamline regulations, enhance transparency, and facilitate foreign portfolio investments while ensuring compliance with FEMA and RBI Act provisions.

The Master Direction – Non-Banking Financial Company – Account Aggregator (Reserve Bank) Directions, 2016 (updated as on September 6, 2024) establishes the regulatory framework for NBFC-Account Aggregators (NBFC-AAs) in India. These guidelines mandate that only registered companies can operate as Account Aggregators, requiring them to obtain a Certificate of Registration from the RBI. Key provisions include annual assessments of the ‘fit and proper’ status of directors and key management personnel, RBI approval for significant ownership changes, and adherence to financial criteria for dividend declarations. Additionally, NBFC-AAs must ensure that outsourced services comply with RBI’s risk management standards and are subject to periodic returns and inspections by the RBI.

The Master Directions on Fraud Risk Management in NBFCs (including HFCs) issued by RBI lay down a unified framework for early detection, reporting, and mitigation of frauds. These guidelines aim to strengthen internal controls and promote a proactive fraud risk governance culture across all NBFCs.

The Master Direction – Non-Banking Financial Company – Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 provides a comprehensive regulatory framework for NBFCs that are either systemically important non-deposit taking or deposit-taking entities. It outlines guidelines on capital adequacy, asset classification, provisioning norms, corporate governance, and reporting requirements to ensure financial stability and protect stakeholders’ interests.

These directions are applicable to NBFCs registered under the Reserve Bank of India Act, 1934, and aim to align their operations with prudential norms and risk management practices.

The Master Direction – Non-Banking Financial Company – Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016 provides a regulatory framework for NBFC-NDSIs. These directions establish guidelines for registration, governance, prudential norms, and reporting requirements to ensure the sound functioning and financial stability of such companies.

The Master Direction – Exemptions from the provisions of RBI Act, 1934 (updated as on April 01, 2022) outlines specific exemptions granted to certain non-banking financial entities from select provisions of the RBI Act. These exemptions aim to streamline regulatory requirements for entities like payment system operators, merchant bankers, housing finance institutions, and others, based on their operational nature and risk profiles.

For instance, non-banking institutions authorized to operate payment systems and issue prepaid payment instruments under the Payment and Settlement Systems Act, 2007, are exempted from provisions of Chapter III B of the RBI Act, 1934, limited to money received for issuing such instruments. Similarly, entities like merchant banking companies, housing finance institutions, and certain government companies are exempt from sections like 45-IA, 45-IB, and 45-IC, provided they meet specific criteria related to their operations and financial activities.

These exemptions are designed to ensure that regulatory oversight is proportionate and tailored to the specific functions and risk exposures of different financial entities, thereby promoting efficiency without compromising financial stability.