RBI Issues Amended Norms on Opening of Branches by NBFCs

Current Context: On April 15, 2026, the RBI issued the NBFC – Branch Authorisation (Amendment) Directions, 2026, shifting toward deregulation and ease of doing business.

• The new rules reduce micro‑management of branch openings and adopt a trust-based model for financially strong NBFCs.

Highlights

• No Prior Approval: Most NBFCs can now open branches freely unless under specific restrictions.
• Financial Tiering:
• NOF ≤ ₹50 cr → Home state only.
• NOF > ₹50 cr, below AA → Home state only.
• NOF > ₹50 cr, AA or higher → Nationwide expansion.
• Gold Loan NBFCs: 1,000-branch approval rule scrapped; strict gold collateral norms remain.
• Housing Finance Companies: No longer need NHB intimation for domestic branches.
• Branch Closures: Still regulated — 3 months’ public notice + regulator intimation required.

Question:

Q.1 Under the RBI’s NBFC – Branch Authorisation (Amendment) Directions, 2026, which NBFCs are allowed nationwide expansion?
a) All NBFCs
b) NBFCs with NOF ≤ ₹50 crore
c) NBFCs with NOF > ₹50 crore and AA or higher rating
d) Only government-owned NBFCs

Answer: c) NBFCs with NOF > ₹50 crore and AA or higher rating net owned funds and strong credit rating are required for nationwide operations.