Holding firms and NBFCs reshape assets to sidestep RBI registration rules

Financial groups that own non-banking finance companies (NBFCs) or core investment companies (CICs) are tweaking their balance sheets to escape the Reserve Bank of India's (RBI) scrutiny. The adjustments involve stripping public-fund status, funding entities with equity or convertible instruments, and ensuring non-financial revenue exceeds financial income, sometimes by merging holding and operating firms. RBI has sent notices to firms that have not yet registered or are not complying with post-registration mandates, which require board-approved asset-liability management policies, risk committees, and qualified directors.

While the regulator recently exempted entities below 1,000 crore assets without a customer interface, many companies still seek to avoid the lengthy registration process that can freeze new investments. Analysts attribute the shift to tighter audit reporting under the Companies Act, heightened media focus on RBI norms, and a desire to prevent delays in capital deployment. Consultants such as Bhavesh Vora warn that these maneuvers reflect broader attempts to limit regulatory oversight.