The above-mentioned plan comes in the wake of RBI lifting the proposed bar, mentioned in the RBI Draft Circular of October 2024 – Forms of Business and Prudential Regulation for Investments, on overlap in the activities of a bank and its group entity.
By bringing in a strategic partner, the Bank can dilute its equity stake in the subsidiary and raise some capital for it, the official said. There is also a possibility that the subsidiary can finance its future growth through debt reduction.
Axis Finance is the wholly owned subsidiary of Axis Bank (NBFC). It offers loans to companies, SMEs and private customers.
As per the RBI’s (Commercial Banks – Undertaking of Financial Services) (Amendment) Directions, 2025, basically every form of business will be carried on by one entity in a banking group. However, if a bank undertakes any form of business through more than one entity within a banking group, the same must be done on the basis of appropriate grounds such as business segmentation/specialization duly recorded and approved by the bank’s board.
Further, where the lending is also conducted through a group entity, additional terms and conditions will apply to such group entity (NBFCs including HFCs), including regulations applicable to the Upper Layer NBFC, other than the requirement for listing, whether the NBFC has been specifically identified by the Reserve Bank as Upper Layer NBFC or not.
Notwithstanding the same, the listing requirement will be satisfied by the NBFC group entities identified as Upper Layer by the Reserve Bank.
Referring to the RBI’s Forms of Business Circular, the Axis Bank official said: “All options are on the table….”
Published on January 26, 2026
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