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%, 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% 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.
Moneycontrol
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