The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (All India Financial Institutions – Undertaking of Financial Services) Directions, 2025.
The following has been stated namely: -
• It establishes a comprehensive framework governing the manner in which all-India financial institutions (AIFIs) may invest, expand or engage in financial services.
• The Directions define key terms—such as “financial services company”, “non-financial services company” and “subsidiary”—and mandate that AIFIs shall obtain prior RBI approval for new investments, strictly adhere to prescribed exposure limits and formulate board-approved investment policies.
• AIFIs are required to maintain arm’s-length relationships with their subsidiaries, prohibit preferential treatment or unsecured advances without RBI sanction, and ensure that foreign-based branches or subsidiaries and those in International Financial Services Centres (IFSCs) comply with both domestic law and host-regulator norms, including for derivatives activity.
• The document also repeals earlier guidelines in this domain, clarifying that these new directions are in addition to existing laws and not intended to override them.
• This shall come into force from November 28, 2025.
[Notification no. - RBI/DOR/2025-26/320 DOR.AUT.REC.No.239/24-01-041/2025-26]
