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Business News/ Industry / Banking/  RBI wants NBFCs to seek prior nod before any takeover
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RBI wants NBFCs to seek prior nod before any takeover

Buyout of 26% or more of paid-up equity capital of an NBFC, or a change in more than 30% of its directors, would need RBI's nod

RBI said the sources of funds of shareholders buying stakes in any non-banking finance institution will have to be disclosed. Photo: MintPremium
RBI said the sources of funds of shareholders buying stakes in any non-banking finance institution will have to be disclosed. Photo: Mint

Mumbai: The Reserve Bank of India (RBI) proposed in draft guidelines published on Monday that prior written permission be obtained from the central bank for any takeover of a non-banking finance company (NBFC).

The buyout of 26% or more of the paid-up equity capital of an NBFC, or a change in more than 30% of its directors, would need the central bank’s permission, the RBI said in a statement.

NBFCs form a big part of India’s so-called shadow banking system and the central bank has issued several guidelines to strengthen regulation and increase transparency.

The RBI also said that sources of funds of the shareholders buying stake in any NBFC will have to be disclosed. Reuters

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Published: 30 Mar 2015, 09:04 PM IST
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