What changed
Earlier, CICs that held at least 90% of assets in shares for holding stakes, did not trade those shares (except block sales), and did no other financial activity were exempt from RBI registration. The new circular removes that exemption: investing in shares for holding stake is now considered NBFC business. Systemically important CICs (asset size ≥ ₹100 crore) must obtain Certificate of Registration and comply with RBI's NBFC-ND-SI framework.
What it means for you
Banks and lenders dealing with CICs must now treat systemically important CICs as regulated NBFCs, subject to prudential norms on capital adequacy, exposure limits, and reporting. This increases compliance burden for large CICs but brings regulatory clarity. Smaller CICs (asset size < ₹100 crore) remain outside the net, so lenders need to verify asset size before extending credit.
What you must do
- Verify whether your CIC borrower or investee has asset size ≥ ₹100 crore; if yes, ensure it holds a valid RBI Certificate of Registration.
- Update internal credit policies to classify systemically important CICs as NBFC-ND-SI for exposure limits and risk-weighting.
- Monitor CIC compliance with RBI directions on capital adequacy, leverage, and reporting as part of due diligence.
- Advise CIC clients with asset size ≥ ₹100 crore to register with RBI if not already done.
Who it affects
Core Investment Companies with asset size ≥ ₹100 crore, Banks and financial institutions lending to or investing in CICs, NBFC regulators and compliance teams, Group holding companies structured as CICs
What is the asset threshold for a CIC to be considered systemically important?
A CIC with asset size of ₹100 crore or more as per the last audited balance sheet is systemically important and must register with RBI.
Are all CICs now required to register with RBI?
No. Only systemically important CICs (asset size ≥ ₹100 crore) must register. CICs with asset size below ₹100 crore are exempt from registration and most RBI directions.
Does this circular change the definition of 'carrying on the business of acquisition of shares'?
Yes. Investing in shares of other companies, even solely for holding stake, is now regarded as NBFC business under Section 45I(c)(ii) of the RBI Act, removing the earlier exemption for pure holding companies.