Three NBFC categories merged to create NBFC-ICC

MUMBAI: At a time when NBFCs sector is making regular headlines for different reasons, RBI has decided to merge three categories of NBFCs – Asset Finance Companies (AFCs), Loan Companies (LCs) and Investment Companies (ICs) into a new single category by the name NBFC Investment and Credit Company (NBFC- ICC).

“On a review, it has been decided that in order to provide NBFCs with greater operational flexibility, harmonisation of different categories of NBFCs into fewer ones shall be carried out based on the principle of regulation by activity rather than regulation by entity,” RBI said in a statement.

The RBI release has further explained that a deposit-taking NBFC-ICC shall invest in unquoted shares of another company, which is not a subsidiary company or a company in the same group of the NBFC, not exceeding twenty percent of its owned fund.

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