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RBI CIRCULAR
(i) Henceforth, prior written permission of the Reserve d. Declaration by the proposed directors/
Bank shall be required for shareholders that they are not associated with any
a. any takeover or acquisition of control of an NBFC, company, the application for Certificate of
which may or may not result in change of Registration (CoR) of which has been rejected by
management; the Reserve Bank;
b. any change in the shareholding of an NBFC, e. Declaration by the proposed directors/
including progressive increases over time, which shareholders that there is no criminal case,
would result in acquisition/transfer of shareholding including for offence under section 138 of the
of 26 per cent or more of the paid up equity capital Negotiable Instruments Act, against them; and
of the NBFC. Prior approval would, however, not
be required in case of any shareholding going f. Bankers' Report on the proposed directors/
beyond 26% due to buyback of shares/reduction in shareholders.
capital where it has approval of a competent
Court. The same is however required to be (ii) Applications in this regard may be submitted to the
reported to the Reserve Bank not later than one Regional Office of the Department of Non-Banking
month from its occurrence; Supervision in whose jurisdiction the Registered Office
of the NBFC is located.
c. any change in the management of the NBFC which
would result in change in more than 30 per cent 4. Requirement of Prior Public Notice about change in
of the directors, excluding independent directors. control/ management
Prior approval would not be required for those i. A public notice of at least 30 days shall be given before
directors who get re-elected on retirement by
rotation. effecting the sale of, or transfer of the ownership by
sale of shares, or transfer of control, whether with or
(ii) Notwithstanding clause (i), NBFCs shall continue to without sale of shares. Such public notice shall be given
inform the Reserve Bank regarding any change in their by the NBFCs and also by the other party or jointly by
directors/management as required in Non-Banking the parties concerned, after obtaining the prior
Financial Companies Acceptance of Public Deposits permission of the Reserve Bank.
(Reserve Bank) Directions, 1998, Non-Systemically
Important Non-Banking Financial (Non-Deposit ii. The public notice shall indicate the intention to sell or
Accepting or Holding) Companies Prudential Norms transfer ownership/control, the particulars of
(Reserve Bank) Directions, 2015 and Systemically transferee and the reasons for such sale or transfer of
Important Non-Banking Financial (Non-Deposit ownership/control. The notice shall be published in at
Accepting Holding) Companies Prudential Norms least one leading national and in one leading local
(Reserve Bank) Directions, 2015. (covering the place of registered office) vernacular
newspaper.
3. Application for prior approval 5. The directions contained above are applicable with
(i) NBFCs shall submit an application, in the company immediate effect, i.e., the same will apply on any takeover
or acquisition of control, any change in the shareholding or
letter head, for obtaining prior approval of the Bank any change in the management occurring after the date
under paragraph 2, along with the following of this circular.
documents:
a. Information about the proposed directors/ 6. Any violation of the aforementioned directions would
result in adverse regulatory action including cancellation of
shareholders as per the Annex; CoR.
b. Sources of funds of the proposed shareholders Yours faithfully,
acquiring the shares in the NBFC; (C D Srinivasan)
Chief General Manager
c. Declaration by the proposed directors/
shareholders that they are not associated with any
unincorporated body that is accepting deposits;
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