RBI wants non-bank finance companies to seek prior nod before any takeover

Mumbai: The Reserve Bank of India proposed in draft guidelines published on Monday that prior written permission be obtained from the central bank for any takeover of a non-banking finance company (NBFC).

The buyout of 26 percent or more of the paid-up equity capital of an NBFC, or a change in more than 30 percent of its directors, would need the central bank`s permission, the RBI said in a statement.

NBFCs form a big part of India`s so-called shadow banking system and the central bank has issued several guidelines to strengthen regulation and increase transparency.

The RBI also said that sources of funds of the shareholders buying stake in any NBFC will have to be disclosed.