The Reserve Bank of India (RBI) has asked banks to submit a detailed plan on ringfencing their core business from other riskier non-core business by March 2026, news agency Reuters reported.

Banks need to have the board’s approval if they want to have multiple entities in the lending business. The RBI has asked lenders to get board approval and implement the new rules by 31 March 2028.

The earlier guidelines in October last year had mandated that only a single entity within a bank group could undertake the same kind of business.

The new norms provide a relief for banks, especially private ones, as they would have had to spin off their lending subsidiaries. HDFC Bank and Axis Bank are among lenders that have separate lending units.

The RBI on Friday said banks will require a so-called no objection certificate for their overseas branches to undertake businesses the parent is not allowed to operate.

Separately, the central bank relaxed rules for non-financial holding companies to conduct businesses like mutual fund, insurance, pension fund management, investment advisory and broking. The entities can intimate the RBI within 15 days following the board decision against the previous requirement for prior approval.