Shares of non-banking financial companies today fell by as much as 7 per cent after the Reserve Bank said that any takeover or acquisition control of NBFCs will now require its prior approval in writing.
IFCI plunged 6.73 per cent, while Manappuram Finance lost 5.20 per cent, Reliance Capital was down 3 per cent, IDFC (2.46 per cent), Muthoot Finance (2.12 per cent) and L&T Finance Holdings (1.43 per cent) on the BSE.
To ensure 'fit and proper' character of the management of NBFCs, the Reserve Bank had yesterday said that any takeover or acquisition control of such an entity (NBFC) will now require its prior approval in writing.
"The prior written permission of the Reserve Bank of India shall be required for any takeover or acquisition of control of an NBFC, whether by acquisition of shares or otherwise," the central bank said in a notification.
Also, any merger or amalgamation of an NBFC with another entity or any merger or amalgamation of an entity with an NBFC that would give the acquirer/another entity control of the NBFC would require permission from the RBI.
Besides, the RBI further said, that any such move that would result in acquisition/transfer of shareholding in excess of 10 per cent of the paid up capital of the NBFC, would also need its approval.