The Reserve Bank of India has issued the Non-Banking Financial Companies – Miscellaneous Amendment Directions, 2026, granting regulatory relaxation to the National Urban Co-operative Finance and Development Corporation Limited (NUCFDC), the Umbrella Organisation (UO) for Primary (Urban) Co-operative Banks (UCBs). These Directions shall come into force with immediate effect.
Exercising its powers under Section 45L of the RBI Act, 1934, and invoking the exemption available under Rule 14(7) of the Companies (Prospectus and Allotment of Securities) Rules, 2014, the RBI has permitted NUCFDC to make offers or invitations to subscribe to its equity shares on a private placement basis to more than 200 persons in aggregate in a financial year.
The relaxation has been granted to enable NUCFDC to induct over 1,400 UCBs as members expeditiously. The statutory provisions under Section 42(2) of the Companies Act, 2013 read with Rule 14(2) restrict private placement offers to 200 persons in a financial year, which would otherwise constrain NUCFDC from granting membership to all UCBs at the earliest.
Under newly inserted Paragraph 13A of the Directions, equity offers under this framework may be made only to UCBs and the National Co-operative Development Corporation (NCDC). NUCFDC must have a Board-approved policy for resource planning covering the planning horizon and periodicity of private placements. The offer document must clearly state that subscribing UCBs shall ensure compliance with applicable statutory requirements as well as RBI instructions while applying for the shares.
The Directions further stipulate that NUCFDC shall not extend any loan, advance, or other financial accommodation against the security of its own shares. The proceeds of the share capital raised must be used strictly for purposes consistent with NUCFDC’s mandate as approved by the RBI. The corporation is also required to ensure compliance with all applicable statutory and regulatory requirements relating to private placement of securities.
Additionally, NUCFDC must submit a quarterly statement to the Department of Regulation, RBI, Central Office within 15 days from the close of each quarter, detailing the amount of equity raised, the number and category of subscribers, and the subscription amounts, both during the quarter and cumulatively.
As per Paragraph 13B, the Directions have come into force with immediate effect and will remain valid until March 31, 2029, unless modified, withdrawn, or extended earlier by the RBI.
