Acquiring control of an existing NBFC requires RBI's prior written approval where the acquisition results in change of control, acquisition of 26% or more of paid-up capital, or change in more than 30% of directors excluding independent directors. After approval, a public notice is issued and the transaction is completed after the notice period.
Why take over an NBFC
It can be faster than a fresh registration, but depends on the target's compliance.
Due diligence
- RBI returns and inspections
- Loan book and NPAs
- Tax and legal issues
Process
- Sign term sheet.
- Apply to RBI with acquirer details.
- Receive approval.
- Public notice.
- Complete share transfer and board changes.
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Get expert help →After takeover
Update RBI records, KYC, policies and compliance systems.
Frequently asked questions
How long does RBI approval take?
Commonly a few months.
Can the NBFC operate during the process?
Yes, under existing management until completion.
Is a shell NBFC risky?
Dormant NBFCs may have compliance gaps; diligence is essential.
Are foreign acquirers allowed?
Subject to FDI rules and RBI approval.
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