The Reserve Bank of India (RBI) is establishing a working group to review regulatory and supervisory framework for core investment companies (CICs).
In 2010, the reserve bank introduced separate framework for the regulation of CICs having recognised a difference in the business model of a holding company relative to other non-banking financial companies.
Since then, the reserve bank feels corporate group structures have become more complex with multiple layering and leveraging. This has led to greater inter-conectedness for the financial system through access to public funds. Due to this, it believes it needs to strengthen the corporate governance framework of CICs.
The working group’s agenda will be to examine the current regulatory framework for CICs and whether they are effective. It will also assess the suitability of RBIs approach towards the registration of CICs, including incidents of multiple CICs being allowed in a group.
In addition to this, it will suggest measures to reinforce corporate governance and disclosure requirements for CICs, assess the supervisory returns submitted by CICs, and review the measures taken by RBIs supervision of CICs.
A report will be submitted by the working group by October 31 2019.
The group is being chaired by Shri Tapan Ray, the non-executive chairman of Central Bank of India and former Secretary, Ministry of Corporate Affairs, Govt. of India
Other members of the group are: Reserve Bank of India executive director Lily Vadera, Securities and Exchange Board of India executive director Amarjeet Singh, Reserve Bank of India chief general manager T Rabishankar, State Bank of India deputy managing director H K Jena, and Association of Mutual Funds in India chief executive N S Venkatesh.
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