Tapan Ray Committee on Core Investment Companies

The Reserve Bank of India (RBI) has formed a committee headed by Tapan Ray to review regulatory guidelines and supervisory framework applicable to core investment companies (CICs).

What is core Investment Company?

RBI defines Core Investment Company (CIC) as a non-banking financial company which undertakes the business of acquisition of shares and securities and which satisfies the following conditions:

  • Holds not less than 90 per cent of its net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies.
  • Its investments in the equity shares in group companies constitute not less than 60 per cent of its net assets.

CICs invest in shares for holding a stake in group companies not for the purpose of trading, and they also do not carry on any other financial activity.

Terms of Reference

  • Examine the current regulatory framework for CICs in terms of adequacy, efficacy and effectiveness of every component thereof and suggest changes.
  • Assess the appropriateness of and suggest changes to the current approach of the RBI towards registration of CICs, including the practice of multiple CICs being allowed within a group.
  • Suggest measures to strengthen corporate governance and disclosure requirements for CICs and assess the adequacy of supervisory returns submitted by CICs and suggest changes.

Based on the recommendations of the committee the RBI will adopt measures to strengthen the corporate governance framework of CICs.


Leave a Reply