India's central bank on Friday asked banks to submit a detailed plan on ringfencing their core business from other riskier non-core business by March 2026.

The Reserve Bank of India said banks can have multiple entities in the lending business, but with approval of the bank's board. Lenders have been asked to get board approval and implement the new rules by March 31, 2028.

This is a reversal from initial guidelines, which were released in October last year and mandated that only a single entity within a bank group could undertake the same kind of business.

The change comes as a relief for banks, especially private ones, which would have needed to spin off their lending subsidiaries. HDFC Bank and Axis Bank are among lenders that have separate lending units.

The RBI said on Friday that

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