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Informist, Wednesday, Oct. 1, 2025

 

MUMBAI – The Reserve Bank of India Wednesday said the proposed bar on overlap in the businesses undertaken by a bank and its group entity is being removed. Announcing the Monetary Policy Committee's decision, RBI Governor Sanjay Malhotra said the draft guidelines on forms of business and investment for banks issued in October 2024 have been finalised and shall be issued shortly.

 

In October last year, the central bank had said banks must seek the regulator's approval before starting any new activity--other than those already allowed by it--through a group entity. The move was aimed to avoid redundancies and overlapping risks and ensure accountability. However, on Wednesday, the RBI said, "Based on feedback and review, the proposed bar on overlap in the businesses undertaken by a bank and its group entity is being removed."

 

"The circular envisages to streamline the activities being undertaken by banks and their group entities while providing more operational freedom to the banks and NOFHCs (Non-Operative Financial Holding Company) for equity investments and setting up group entities respectively."

 

In a unanimous decision, the Monetary Policy Committee left the policy repo rate unchanged at 5.50% and retained its 'neutral' stance.  End

 

Reported by J. Navya Sruthi

Edited by Ashish Shirke

 

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