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Draft RBI (NBFC – Responsible Business Conduct) Amendment Directions, 2026

 -  From Policy Intent to Enforceable Conduct Standards On 11 February 2026, the Reserve Bank of India released the   Draft Non-Banking Financial Companies – Responsible Business Conduct (Amendment) Directions, 2026  (“ Amendment Directions ”), effective from 1 July, 2026 . These amendments form part of the RBI’s broader effort to recalibrate conduct regulation for regulated entities, particularly in areas impacting customer protection, fairness and governance. Notably, the Amendment Directions flow directly from the policy intent articulated in  RBI’s Statement on Developmental and Regulatory Policies , released alongside the February 2026 Monetary Policy. The Amendment Directions therefore represent a deliberate regulatory progression rather than an isolated compliance update. Why Responsible Business Conduct Matters? The regulatory emphasis on conduct is rooted in persistent customer-level issues observed across the NBFC sector. Common themes emerging f...
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RBI Draft Amendment Directions 2026: A Move Toward Proportionate NBFC Regulation—With Caveats

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The Reserve Bank of India (RBI) has issued the Draft Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Amendment Directions, 2026 (“ Draft Directions ”), inviting public comments by March 4, 2026 . The draft proposes a targeted recalibration of the NBFC regulatory framework , particularly for smaller, low-risk entities, by introducing a pathway for exemption from registration for select NBFCs. While the policy direction is clearly aligned with risk-based and proportional regulation , certain accompanying clarifications (FAQs) may require refinement to ensure that the intended relief is not diluted in practice. Key Proposals Under the Draft Directions: 1. Exemption From Registration for Select NBFCs: The Draft Directions propose that NBFCs meeting all of the following criteria may be exempt from registration under section 45-IA of the RBI Act, 1934: no acceptance of public funds ; no customer interface...
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Prize-Linked Savings Accounts: Can “Savings with a Thrill” Work in India?

Prize-Linked Savings Accounts (PLS accounts), also known as  lottery-linked deposit accounts , are an innovative financial product designed to encourage savings by combining the  security of a traditional savings account  with the  excitement of a lottery-style reward . Instead of offering higher interest rates, these accounts provide depositors with a chance to win cash prizes—without risking their principal. Globally, PLS schemes have been used as a tool for  financial inclusion , particularly to attract individuals who may otherwise remain outside the formal banking system. However, their compatibility with India’s regulatory framework raises important legal and policy questions. What Are Prize-Linked Savings Accounts? A prize-linked savings account offers depositors an opportunity to participate in periodic prize draws based on the amount they save. The core idea is simple: Depositors place money into a savings account. Each qualifying deposit ...
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