The Reserve Bank of India (RBI) today clarified that a non-banking finance company (NBFC) together with its subsidiaries and group companies cannot hold more than 50 per cent stake in an insurance company.
“It is clarified that in case more than one company (irrespective of undertaking financial activity or not) in the same group of the NBFC wishes to take a stake in the insurance company, the contribution by all companies in the same group shall be counted for the limit of 50 per cent prescribed for the NBFC in an insurance joint venture,” the central bank said in a notification. Earlier, the banking regulator had capped NBFC’s stake in an insurance company at 50 per cent.
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