It may be mentioned, the Indian Central Bank/financial sector
regulator, viz., the Reserve Bank of India (the
"RBI"), vide its Notification No. DNBR.(PD) 029/CGM(CDS)-2015
issued on July 09, 2015, has repealed the Non-Banking Financial
Companies (Approval of Acquisition or Transfer of Control)
Directions, 2014 and replaced the same with the Non-Banking
Financial Companies (Approval of Acquisition or Transfer of
Control) Directions, 2015 ("NBFC Directions
2015"), making it mandatory, w.e.f. 9 July 2015, for
all Non-Banking Finance Companies
"NBFCs") to obtain its prior written
permission/approval, in respect of the following matters:
any takeover or acquisition of
control of an NBFC, which may or may not result in change of
any change in the shareholding of an
NBFC, including progressive increases over time, which would result
in acquisition/ transfer of shareholding of 26 per cent or more of
the paid- up equity capital of the NBFC. Prior approval would,
however, not be required in case of any shareholding going beyond
26% due to buyback of shares/ reduction in capital where it has
approval of a competent Court. The same is, however, required to be
reported to the RBI not later than one month from its occurrence;
any change in the management of the
NBFC which would result in change in more than 30 per cent of the
directors, excluding independent directors. Prior approval would
not be required for those directors who get re-elected on
retirement by rotation.
It may be added, the concerned NBFC would have to first make an
application along with relevant supporting/prescribed documents as
provided in Para 4 of the NBFC Directions 2015, to the RBI's
Regional Office- Department of Non-Banking Supervision having
jurisdiction over its registered office. It may be further added,
prior to effecting the transfer and post the RBI approval, in terms
of Para 5 of the NBFC Directions 2015, such NBFC and the
transferee, jointly or separately, would also have to give a 30
days public notice.
Primary dealers have been excluded from the scope of the NBFC
Directions 2015, however, non-deposit accepting NBFCs have been
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