Overseas Investments by CICs

Core Investment Companies (CICs) invest primarily in group companies, in different sectors of the economy. Being holding companies they need to invest in both financial and non-financial activities. The RBI has therefore decided to issue a separate set of directions to CICs with regard to their overseas investments. 

 

Accordingly, all CICs investing in joint ventures/subsidiaries/representative offices overseas in financial sector will require prior approval from the RBI. This approval will be subject to the CIC fulfilling the conditions enumerated in the newly promulgated directions issued by RBI. Should CICs currently exempted from registration, desire to make overseas investments in financial sector, they would require a certificate of registration from RBI and shall have to comply with all the regulations applicable to registered CICs. However exempted CICs do not require to be registered with RBI for making investments in non-financial sector.

Proposed changes to NBFC Regs

Pursuant to the Usha Thorat Committee report, the RBI has proposed wide-ranging amendments to the NBFC regulations. In order to adopt a consultative approach, the RBI has placed on its website, the draft guidelines to address issues and concerns in the NBFC sector. 

The draft revised guidelines relate to entry point norms, principal business criteria, prudential regulations, liquidity requirements for NBFCs and corporate governance. While accepting some of the suggestions, the RBI has proposed additional time to bring the new regulatory framework into existence. My colleague, Mr. Jayant Thakur has commented on the proposed changes elsewhere.

Checklists for NBFC Registration

In order to expedite the process of obtaining registration from RBI as NBFCs, the checklists of documents to be submitted along with the application form have been reviewed and made more exhaustive. As the businesses of the various types of NBFCs vary, the documentation required for registration may also vary.