Requirement For Obtaining Prior Approval Of RBI In Cases Of Acquisition/ Transfer Of Control Of NBFCs

Pursuant to the notification dated July 9, 2015, Non-Banking Financial Companies (Approval of Acquisition or Transfer of Control) Directions, 2014 have been amended to insert the requirement of prior approval of RBI in case of (i) any acquisition of takeover of control of NBFC (with or without change in management) or (ii) any change in shareholding of NBFC resulting in acquisition of 26% (twenty six percent) of the paid up equity capital of such NBFC, or (iii) any change in management which results in change in more than 30% (thirty percent) of the directors of NBFC. Further, after the approval of the RBI is obtained, a public notice of at least 30 (thirty) days will also be required prior to the sale of shares or transfer of control.

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