The Reserve Bank of India has decided to allow non-banking financial companies (NBFCs), including gold loan companies and microfinance institutions, to open branches without its prior approval in a bid to provide them operational flexibility.
This move is to facilitate ease of doing business while ensuring necessary regulatory compliance, going by the Reserve Bank of India (Non-Banking Financial Companies – Branch Authorisation) Amendment Directions, 2026.
This also comes in the backdrop of NBFCs’ gross advances increasing to 25 per cent of scheduled commercial banks’ gross advances as at March-end 2025 against 23.64 per cent as at March-end 2024.
“An NBFC is generally permitted to open branches without having the need to obtain prior approval from RBI, unless otherwise specifically restricted,” per the amendment to the November 2025 RBI (Non-Banking Financial Companies – Branch Authorisation)
As per the November 2025 the RBI (Non-Banking Financial Companies – Branch Authorisation) Directions, 2025, NBFCs have to notify the RBI of their intention to open the proposed branch.
On receipt of such advice, RBI may, on being satisfied that in the public interest or in the interest of the concerned NBFC or for any other relevant reasons to be recorded, reject the proposal and communicate the same to NBFC. If no advice of rejection of the proposal is communicated by RBI within 30 days from the receipt of such advice, the NBFC may proceed with its proposal.
Gold loan companies
Gold loan companies will heave a sigh of relief due to the freedom to open branches.
The November 25 Directions shackled their branch expansion. As per the Directions, a NBFC - Investment and Credit Company (NBFC- ICC), which is in the business of lending against gold collateral (gold loan company), shall obtain prior approval of RBI to open branches exceeding 1,000. Further, an NBFC-ICC which already has more than 1000 branches, shall approach RBI for prior approval for any further branch expansion.
Besides, no new branches shall be allowed to be opened without the facilities for storage of gold collateral and minimum-security facilities for the pledged gold collateral, per the November 2025 Directions.
Published on April 15, 2026