Acquisition/Transfer of Control of NBFCs: Prior RBI Approval Requirements
The Reserve Bank of India (RBI) has outlined the requirements for obtaining prior approval in cases of acquisition or transfer of control of Non-Banking Financial Companies (NBFCs).
Key Provisions:
The RBI’s prior approval is required for acquisition or transfer of control of NBFCs, except in cases where the transfer is between:
- Relatives;
- Existing shareholders;
- Indian companies or bodies corporate.
Application Process:
An application for prior approval must be submitted to the RBI, accompanied by necessary information about the proposed promoters, directors, and shareholders.
Public Notice Requirement:
A prior public notice is required to be published in at least one national and one local newspaper, disclosing the change in control or management of the NBFC.
Other Laws:
The RBI’s directions do not bar the application of other laws, including the Companies Act, 2013, and the Securities and Exchange Board of India (SEBI) regulations.
Repeal and Saving:
All previous directions and circulars on the subject stand repealed, but any action taken or initiated under those directions shall be deemed to have been taken or initiated under these directions.
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