Tuesday, February 15, 2011


The RBI,On January 5, 2011, revised regulatory framework for (CIC's) and asked all Systematically
Important Core Investment Companies (CIC's-ND-SI) to apply for registration certificate within six months from the date of notification. In case an investment or loan company is not a CIC, it would also require registration. The revised regulations have far reaching implications and non compliance shall result in imprisonment for 1-5 years with fine up to Rs. 1-5 lakhs.

CIC means a NBFC carrying on the business of acquisition of shares and securities, satisfying the following conditions as on the date of the last audited balance-sheet:

  • Holds at least 90% investment of its net assets in equity/ Preference shares, bonds, debentures or loans in group companies.
  • Does not trade in its investments in shares/bonds/ debentures etc. in group companies except for the purpose of dilution or disinvestment.
  • Does not carry on any other financial activity referred to in Section 45 IC of RBI Act.

CIC-ND-SI means a CIC, having total assets of not less than Rs. 100 core, individually or with group companies in aggregate and Raises or holds public funds. 'Adjusted net worth' means aggregate of owned funds, as appearing in the last audited balance sheet as at the end of the financial yearss. Adjusted net worth can be increased by 50% of unrealized appreciation in the book value of quoted investments. Adjusted net worth can be reduced by the amount of diminution in the aggregate book value of quoted investments.


  • Definition of CIC is stringent and may not be fulfilled by many investment companies.
  • Requirement of investment of at least 60% of the net assets needs to be removed.
  • Threshold limit of 90% of its net assets in group companies is very steep and should be reduced to 75%.


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