RBI Update - Reserve Bank of India (Non-Banking Financial Companies – Governance) Amendment Directions, 2026

The Reserve Bank of India has issued the Reserve Bank of India (Non-Banking Financial Companies – Governance) Amendment Directions, 2026, effective immediately, to revise governance requirements applicable to NBFCs under the Scale Based Regulatory Framework. The amendment introduces an exemption for NBFCs classified in the Upper Layer (NBFC-UL) that are fully owned and controlled by the Government, providing that the governance provisions specified under paragraph 43 of the Directions shall not apply to such entities. This change reflects the RBI’s review of the regulatory framework for NBFC-ULs and recognises the distinct ownership and oversight structure of Government-controlled NBFCs, while continuing to subject other Upper Layer NBFCs to the prescribed governance requirements.