The Reserve Bank of India (RBI) is reportedly crafting new regulations that would prohibit private equity firms from maintaining a controlling stake in more than one non-bank financial company (NBFC). The central bank is concerned about the potential for systemic contagion, fearing that financial distress within a global firm could trigger a domino effect across its various Indian lending affiliates. Under these proposed guidelines, any ownership stake exceeding 15% would likely be classified as "control," subjecting the entity to rigorous oversight, while smaller stakes would be treated as passive financial investments.

This move follows a significant surge in foreign interest, with billions of dollars flowing into India's credit sector as demand for loans continues to climb. While industry groups like the Indian Venture and Alternate Capital Association have lobbied for more flexible thresholds to accommodate fintech investments, the RBI has already begun enforcing these principles on a case-by-case basis. By requiring firms like Bain Capital to divest from overlapping holdings and pushing others like Mizuho Financial Group toward consolidation, the central bank aims to ensure greater stability and reduced risk concentration within India’s growing non-banking financial ecosystem.