Takeover of NBFC
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Approval for Takeover or Change in Management of NBFCs
In the corporate landscape, mergers and takeovers are becoming increasingly prominent, impacting the Non-Banking Financial Company (NBFC) sector. To regulate such transactions and ensure financial stability, the Reserve Bank of India (RBI) has established a structured framework for NBFC takeovers and management changes.
When is RBI Prior Approval Required?
RBI’s prior approval is mandatory in the following cases:
- Takeover or Acquisition of Control - If an NBFC undergoes a takeover or a change in ownership that may or may not result in management restructuring.
- Significant Shareholding Changes - If there is an acquisition or transfer of 26% or more of the paid-up capital, either in a single transaction or progressively over time.
- Management Restructuring - If there is a change in more than 30% of the board of directors (excluding independent directors).
Public Notice Requirement:
Public Notice Requirement
- One leading national newspaper
- One local newspaper
Notice Period:
- The announcement must be made at least 30 days before the proposed sale or transfer of shares/ownership.
Why Choose Panchal S K and Associates?
- Expert Guidance - Seamless handling of RBI approval process.
- Regulatory Compliance - Ensuring 100% adherence to RBI norms.
- Legal & Financial Due Diligence - Risk assessment for smooth transitions.
- Transaction Advisory - End-to-end support for NBFC takeovers and mergers.