The Reserve Bank of India (RBI) has offered operational flexibility to non-banking financial companies (NBFCs), allowing them to open branches without prior approval in most cases while imposing certain conditions for deposit taking entities based on net-owned funds.

The branch expansion flexibility is aimed at facilitating ease of doing business while ensuring NBFCs follow necessary compliance.

The central bank has issued Reserve Bank of India (Non-Banking Financial Companies - Branch Authorisation) Amendment Directions, 2026.

"An NBFC is generally permitted to open branches without having the need to obtain prior approval from RBI, unless otherwise specifically restricted," RBI said on Wednesday.

The circular further said a deposit-taking NBFC having NOF of up to Rs 50 crore or a credit rating below AA may open a branch or appoint agents within the state where its registered office is situated.

If NOF of such an NBFC is more than Rs 50 crore and credit rating is AA or above, then it may open a branch or appoint agents anywhere in India.