Axis Bank is weighing options to bolster its wholly-owned subsidiary Axis Finance’s capital, including a combination of capital infusion from the bank itself as well as roping in a strategic partner, said a top management team official.
The aforementioned plan comes in the wake of RBI lifting the proposed bar, mentioned in RBI’s October 2024 Draft Circular – Forms of Business and Prudential Regulation for Investments, on overlap in the businesses undertaken by a bank and its group entity.
By getting 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 fund its future growth by deleveraging.
Axis Finance is Axis Bank’s wholly-owned Non–Banking Finance Company (NBFC) subsidiary. It offers loans to corporates, MSMEs and retail customers.
According to the RBI’s (Commercial Banks – Undertaking of Financial Services) (Amendment) Directions, 2025, as a principle, any form of business shall be undertaken by one entity in a bank group. However, if a bank undertakes a form of business through more than one entity in a bank group, the same shall be done with proper rationale such as business segmentation/specialisation, duly recorded and approved by the Board of the bank.
Further, in case lending business is undertaken through a group entity also, additional conditions shall be applicable to such a group entity (NBFCs including HFCs) including regulations as applicable to Upper Layer NBFC other than the requirement for listing, irrespective of whether the NBFC has been specifically identified by the Reserve Bank as Upper Layer or not.
Notwithstanding the same, listing requirement shall be complied with by those NBFC group entities which are identified by the Reserve Bank as Upper Layer.
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
