RBI Mulls Tighter Rules For Private Equity Ownership In Multiple NBFCs: Report

RBI Mulls Tighter Rules For Private Equity Ownership In Multiple NBFCs: Reuters

The Reserve Bank of India (RBI) is considering tighter rules on private equity (PE) firms holding controlling stakes in multiple non-banking financial companies (NBFCs), according to a Reuters report. The proposed changes could impact PE investors, NBFC ownership structures and regulatory oversight in India's financial sector.

As per the report, authorities hope to encourage smaller financial investments that will be subject to lesser scrutiny. A draft of rules is likely to be finalised after public consultation and they could be formally issued early next year as per the report. Times Now Digital reached out to the Reserve Bank of India (RBI) seeking confirmation and clarification on the reported proposal. However, the central bank had not responded at the time of filing this report.

Under the existing definition cited in the Reuters report, a 25% shareholding in a listed company is considered a controlling stake. However, an investor may also be deemed to exercise control with a smaller shareholding if they have the right to appoint a majority of the company's directors or exercise control over its management or policy decisions.

Under the RBI's proposed framework, investments of 15%…

Original source: https://www.timesnownews.com/business-economy