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Effective July 1, 2026, the RBI’s Amendment Directions introduce "Unregistered Type 1 NBFCs," exempting companies with assets under ₹1,000 crore from registration if they avoid public funds and customer interfaces. This shift addresses legacy issues where investment vehicles were often penalised as "deemed NBFCs" for conducting financial business without a license. These entities are now ideal for family offices, providing benefits like perpetual succession without intensive systemic risk regulations. However, they are barred from overseas investments and must register if they seek public funds or exceed asset thresholds. This modernization streamlines compliance for smaller, low-risk financial entities
INTRODUCTION
If you took a quick dip-stick poll of the number of people who have violated the NBFC Directions by making investments via a company structure or using a corporate investment vehicle, you would have a resounding majority! Most of them would look at you with innocent faces and say that they invested with their own funds or that they did not trade and were only investors! None of these arguments used to cut any ice with the RBI, and the clear view of the regulator was that if the Principal Business of a company was from financial services activities, then the company was a d
