The Reserve Bank of India has amended its 2025 directions on non-banking financial companies undertaking financial services after reviewing the rules for agency business. The revised framework, effective January 1, 2027, defines agency business as an arrangement under which an NBFC sells a third party's financial products or services to its own customers without taking on risk, and limits those arrangements to regulated financial products and services. Customer service and conduct requirements for these activities will be consolidated in the Reserve Bank of India Non-Banking Financial Companies Responsible Business Conduct Directions, 2025. Under the changes, NBFCs may undertake insurance distribution under the corporate agency or broking model without prior Reserve Bank approval, provided they obtain the required Insurance Regulatory and Development Authority of India permission, comply with the separate conduct directions, operate on a fee basis without risk participation, disclose that position upfront, and ensure insurers have grievance redressal arrangements. The same structure applies to eligible housing finance companies. Mutual fund distribution must comply with Securities and Exchange Board of India rules and the same fee-based, no-risk and conduct requirements. NBFCs other than Base Layer NBFCs may also provide Point of Presence services for the National Pension System after registering with the Pension Fund Regulatory and Development Authority, if they meet the prescribed capital to risk weighted assets ratio and recorded a net profit in the preceding financial year. Across insurance, mutual fund and pension distribution, digital channels may display only products covered by the relevant arrangement, and the product provider must have grievance redressal systems in place. The amendment takes effect on January 1, 2027.

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