RBI to register investment firms with assets over Rs100 crore

13 Aug 2010

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Core investment companies (CICs) with assets over Rs100 crore will be required to obtain certificate of registration from it while those having assets below Rs100 crore need no registration, the Reserve Bank of India (RBI) said today.

A non-banking finance company which holds not less than 90 per cent of its total assets in the form of investment in equity shares, preference shares, debt or loans in group companies will be considered as core investment company, the central bank said in a notification.

CICs with an asset size of Rs100 crore or more will be considered as `systemically important core investment companies (CICs-ND-SI) and would be required to obtain certificate of registration from RBI.

The new rule will apply irrespective of any earlier directive or advice under Section 45-IA of the Reserve Bank of India Act, 1934 to the effect that such registration was not required, RBI said.

Every CIC-ND-SI should ensure maintenance of a minimum capital ratio whose adjusted net worth should not be less than 30 per cent of its aggregate risk weighted assets on balance sheet and risk adjusted value of off-balance sheet items as at the end of the financial year as per the last audited balance sheet.

These companies should ensure that their liabilities does not exceed 2.5 times its adjusted net worth as on the date of the last audited balance sheet.

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