RBI Nod Mandatory To Takeover, Acquire Control Of NBFCs

SO
S&A Law Offices

Contributor

S&A Law Offices is a full-service law firm comprising experienced, well-recognized and accomplished professionals. S&A Law Offices aims to provide its clients (both domestic and international) with top-quality counsel and legal insights, which combines the Firm's innovative approach with comprehensive expertise across industries and a broad spectrum of modalities. Being a full-service law firm, we take pride in having the capability of providing impeccable legal solutions across various practice areas and industries and makes an endeavor to provide a 360 degree legal solution. With registered office at Gurugram and other strategically located offices in New Delhi, Mumbai, and Bengaluru, along with associate offices across India, S&A is fully equipped to provide legal services on a pan-India basis.
The Reserve Bank of India said any takeover or acquisition control of such an entity (NBFC) would now require its prior approval in writing.
India Finance and Banking

To ensure 'fit and proper' character of the management of NBFCs, the Reserve Bank of India said any takeover or acquisition control of such an entity (NBFC) would now require its prior approval in writing.

"The prior written permission of the Reserve Bank of India shall be required for any takeover or acquisition of control of an NBFC, whether by acquisition of shares or otherwise," the central bank said in a notification dated 27th May, 2014.

Permission will also be required for any merger or amalgamation of an NBFC with another entity or any merger or amalgamation of an entity with an NBFC that would give the acquirer/another entity control of the NBFC in addition to those resulting in acquisition/ transfer of shareholding in excess of 10 per cent of the paid up capital of the NBFC.

The said directions of the RBI to be known as 'Non- Banking Financial Companies (Approval of Acquisition or Transfer of Control) Directions, 2014, would be applicable to every non-banking financial company (NBFC).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More