Shift made by the RBI’s 2026 Amendment: For years, any Company undertaking investment activities in shares, securities, bonds, mutual funds or other financial instruments was generally expected to obtain NBFC registration under Section 45-IA of the RBI Act, 1934.
But registration came with a heavy compliance framework:
- Minimum Net Owned Fund (NOF),
- Statutory reserve requirements,
- Prudential regulations,
- RBI reporting and inspections,
- Continuous supervisory oversight.
As a result, many HNIs, family offices and investment groups preferred investing through:
- Individuals,
- HUFs,
- Partnership firms, or
- LLPs
While this avoided RBI regulation, it created significant commercial inefficiencies:
- Tax rates @ 35%,
- No limited liability protection,
- Difficult succession and estate planning,
- No perpetual succession,
- Challenges in pooling family capital professionally.
The Turning Point: RBI Amendment Directions, 2026: The RBI’s 2026 amendment changed the landscape completely.
A private limited company undertaking investment activity may now operate without NBFC registration, provided it:
- Does not accept public funds,
- Has no customer interface, and
- Has asset size below ₹1,000 crore.
This effectively creates a lawful corporate investment platform without the traditional NBFC compliance burden.
Tax Efficient may be the Commercial Driver: The biggest attraction is the combination of:
- No RBI registration, and
- Lower corporate taxation of 25%
Permitted Activities: These companies may undertake proprietary investments such as:
- Listed and unlisted equity investments,
- Bonds and debentures,
- Mutual funds, ETFs and AIFs,
- F&O trading on own account,
- IPO and strategic investments.
However, the core principle remains: – Investment must be strictly from owned funds and on own account only — with no public funds or customer-facing activity.