The Reserve Bank of India (RBI) on Friday clarified norms relating to equity contribution by non-bank finance companies (NBFCs) wanting to enter insurance business.
In case more than one company in the same group as an NFBC wants to take a stake in an insurance company, the contribution by all companies in the same group shall be counted for the prescribed limit of 50 percent, the central bank said.
Earlier, the central bank had said the maximum equity contribution an NBFC can hold in a joint venture company is 50 percent of the insurance company.
A subsidiary or company in the same group of an NBFC or of another NBFC engaged in the business of a non-banking financial institution or banking business shall not be allowed to join the insurance company on risk participation basis, it had said.
