RBI wants banks to keep core business safe from risky side hustles
The Reserve Bank of India (RBI) just told banks: protect your main lending business from riskier activities, and show us your plan by March 2026.
Banks can still have more than one lending arm—think HDFC Bank or Axis Bank with their subsidiaries—as long as the board signs off.
The intent appears to be to ensure that core banking operations remain stable, even if other business ventures face difficulties.
What's new and why it matters
This replaces last year's draft that wanted only one lender per group—so it's a bit more flexible now.
Full rollout is due by March 2028.
If an Indian bank's overseas branch wants to do something the parent can't, they'll need a no-objection certificate first.
Plus, non-financial holding companies get an easier path into things like mutual funds and insurance—just a heads-up to RBI instead of waiting for permission.
For anyone interested in how banks juggle safety and innovation, this is worth knowing.