Regulatory Framework for Core Investment Companies (CICs)
The Reserve Bank of India (RBI) has issued a master circular outlining the regulatory framework for Core Investment Companies (CICs).
Background: CICs are non-banking financial companies (NBFCs) that have asset size of ₹100 crore or more and have a minimum of 90% of their assets in the form of investment in shares, debentures, and bonds.
Systemic Importance: CICs are considered systemically important due to their size and interconnectedness with the financial system.
Registration and Capital Requirements: CICs are required to register with the RBI and maintain a minimum capital requirement of ₹2 crore. The capital requirements are based on the risk-weighted assets, with on-balance sheet assets having a percentage weight and off-balance sheet items having a credit conversion factor.
Leverage Ratio: CICs are required to maintain a leverage ratio of at least 3.
Exemptions: Certain CICs are exempt from certain provisions, such as the requirement to maintain a minimum capital requirement.
Annual Statutory Auditors Certificate: CICs are required to submit an annual statutory auditors certificate to the RBI.
Transition Period: CICs have a transition period of one year to comply with the conditions outlined in the circular.
Action Plan: CICs are required to submit an action plan to the RBI outlining their plan to comply with the conditions.
Chat with the Master Circular:
Download: Master Circular- Regulatory Framework for Core Investment Companies (CICs)