RBI Relaxes Prior Public Notice Norms for NBFC Change in Control
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2005-06/285 · issued 24 Jan 2006 · ~2 min read
Quick answerRBI has relaxed prior public notice requirements for NBFCs undergoing change in control/management. For mergers/amalgamations via High Court order, no separate public notice is needed; for other cases, a 30-day prior notice remains mandatory.
What changed
Previously, all NBFCs (deposit-taking and non-deposit-taking) had to give prior public notice for any change in control/management. Now, for mergers and amalgamations approved by a High Court under Sections 391 and 394 of the Companies Act 1956, the NBFC only needs to inform RBI within one month of the court order, and no separate public notice is required. For all other cases (sale/transfer of ownership), the 30-day prior public notice rule continues.
What it means for you
This relaxation reduces compliance burden for NBFCs undergoing court-approved mergers, as they no longer need to issue an additional public notice solely for RBI's requirement. However, RBI will still conduct due diligence on directors of any new NBFC formed through such changes. Lenders should note that the core requirement for prior notice in non-court-approved changes remains unchanged.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
For court-approved mergers/amalgamations, inform RBI within one month of the High Court order, attaching the order; no separate public notice needed.
For other changes in control/management (sale/transfer), continue to give a 30-day prior public notice as per earlier circulars.
Ensure all other terms and conditions from earlier circulars (DNBS (PD) CC.No.11/02.01/99-2000 and No.12/02.01./99-2000) are still complied with.
If a new NBFC is formed, be prepared for RBI's due diligence on directors under Section 45 IA(4)(c) of the RBI Act, 1934.
Who it affects
All Non-Banking Financial Companies (NBFCs) including Residuary Non-Banking Companies (RNBCs), Deposit-taking and non-deposit-taking NBFCs, NBFCs undergoing merger, amalgamation, or change in management/control
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-19 19:20 IST
Status change: withdrawn10 Jul 2026, 04:02 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Do we need to issue a public notice for a merger approved by the High Court?
No, if the merger is under Sections 391 and 394 of the Companies Act 1956 and approved by the High Court, you only need to inform RBI within one month of the court order. No separate public notice is required.
What if the change in control is through a sale or transfer, not a court-approved merger?
In such cases, you must still give a prior public notice of 30 days as per the earlier circulars. The relaxation only applies to court-approved mergers and amalgamations.
Will RBI still check the directors of the new NBFC after a change in control?
Yes, RBI will continue to conduct due diligence on the directors of any new NBFC formed through change of management, merger, or acquisition, to ensure compliance with Section 45 IA(4)(c) of the RBI Act.
📜 Read the original circular — full text as issued by RBI
RBI/2005-06/285
DNBS (PD) C.C. No. 63 / 02.02 / 2005-06
January 24, 2006
To,
All Non-Banking Financial Companies (NBFCs),
Including Residuary Non-Banking Companies (RNBCs)
Dear Sirs,
Prior Public Notice about change in control/management
In terms of paragraph 2(b) of the Company Circular DNBS (PD) CC.No.11/02.01/99-2000 dated November 15, 1999 read with paragraph 5(iii) (a) of the Company Circular DNBS (PD) CC, No.12/02.01./99-2000 dated January 13, 2000 , all NBFCs (Deposit taking and Non-Deposit taking) are required to give prior public notice about the change in the control/management of the company.
2. The matter has been reviewed and it has been decided to relax the norms of giving the prior public notice by the NBFCs about change in the control /management of the NBFCs. Accordingly, the following changes are effected in the above circulars:
(i). Merger and amalgamation in terms of the High Court Order .
(a) Where merger and amalgamation takes place in terms of the High Court order in pursuance of Sections 391 and 394 of the Companies Act 1956, the company shall inform the Bank about merger or amalgamation along with Court’s order approving the same within a period of one month from the date of the order. As the public notice is given by the companies under the Companies Act 1956 and Rules made thereunder, no further public notice is required to be given by the companies in terms of the Bank’s Circular as mentioned above.
(b) However there will be no change in other instructions contained in paragraph 5(iii) (b) of the Company Circular DNBS (PD) .CC No.12/02.01/99-2000 dated January 13, 2000 .
(ii) Other cases
Where merger and amalgamation or change in the management of the company takes place upon sale / transfer otherwise than as stated in sub-paragraph (i) above, the NBFCs (including RNBCs)(deposit taking and non-deposit taking companies ) should give prior public notice of 30 days.
(iii) Other terms and conditions as stipulated in circulars mentioned above shall remain the same.
3. In case, a new NBFC is formed by the change of management consequent upon merger/amalgamation/acquisition/sale or transfer of ownership, the Bank will continue to undertake due diligence on the directors of the new NBFC to ensure compliance of the provisions of Section 45 IA (4)( c ) of the Reserve Bank of India Act, 1934.
4. Please acknowledge receipt to the Regional Office of the Department of Non-Banking Supervision, Reserve Bank of India under whose jurisdiction the Registered Office of your company is situated
Yours faithfully,
Sd/-
(P. Krishnamurthy)
Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2005-06/285 · issued 24 Jan 2006. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2712&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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