Leverage Ratio:<\/strong> The outside liabilities must not exceed 2.5 times the ANW.<\/li>\n<\/ul>\n\n\n\nImportant 2026 Update:<\/strong> Per the RBI Amendment Directions 2026, companies can now include quarterly profits in their Owned Funds computation, provided those statements have undergone a limited review by statutory auditors.<\/p>\n\n\n\nGroup Risk Management Committee (GRMC)<\/strong><\/h3>\n\n\n\nFor large groups, the parent CIC (or the one with the largest asset size) is mandated to form a Group Risk Management Committee. This committee must:<\/p>\n\n\n\n
\n- Have at least five members.<\/li>\n\n\n\n
- Include at least two independent directors.<\/li>\n\n\n\n
- Identify potential intra-group conflicts of interest and assess the leverage of the group as a whole.<\/li>\n<\/ul>\n\n\n\n
<\/span>Relevance in Today\u2019s Business Environment<\/span><\/h2>\n\n\n\nWhy would a conglomerate choose to form a CIC instead of a standard NBFC?<\/p>\n\n\n\n
\n- Regulatory Exemption:<\/strong> Registered CICs are exempt from the standard NBFC requirements regarding Net Owned Funds (NOF) and Credit Concentration Norms (which limit how much you can invest in a single entity).<\/li>\n\n\n\n
- Strategic Consolidation:<\/strong> It allows a promoter to consolidate their holdings under one professional entity, making it easier to raise capital for the entire group via the parent holding company.<\/li>\n\n\n\n
- Overseas Investment:<\/strong> A CIC provides a compliant vehicle for Indian groups to invest in the financial sector abroad, provided they maintain a 400% cap on their owned funds for such investments.<\/li>\n<\/ul>\n\n\n\n
<\/span>Compliance Checklist for 2026<\/span><\/h2>\n\n\n\nIf you are managing a Core Investment Company or planning to register one, ensure you have the following in place:<\/p>\n\n\n\n
\n- Statutory Auditor\u2019s Certificate:<\/strong> An annual certification confirming that the company continues to meet the 90\/60 asset criteria.<\/li>\n\n\n\n
- Consolidated Financial Statements:<\/strong> Mandatory under the Companies Act and RBI guidelines to provide a “whole of group” view.<\/li>\n\n\n\n
- Chief Risk Officer (CRO):<\/strong> Mandatory for CICs with an asset size exceeding \u20b95,000 crore.<\/li>\n\n\n\n
- Fit and Proper Criteria:<\/strong> Continuous assessment of directors to ensure they meet RBI\u2019s governance standards.<\/li>\n<\/ul>\n\n\n\n
<\/span>Conclusion<\/span><\/h2>\n\n\n\nThe Core Investment Company remains the most effective vehicle for managing large-scale corporate holdings in India. However, the “light-touch” regulation of the past has been replaced by a risk-centric approach. In 2026, the focus has shifted from mere asset size to inter-connectedness\u2014ensuring that the failure of one layer of a group does not bring down the entire financial ecosystem.<\/p>\n\n\n\n
<\/span>FAQs<\/span><\/h2>\n\n\n\n1. Can a CIC accept public deposits?<\/strong><\/p>\n\n\n\nNo. By definition, a Core Investment Company is a non-deposit-taking entity. While it can raise \u201cpublic funds\u201d (like commercial paper or debt instruments), it is strictly prohibited from accepting traditional savings or fixed deposits from retail customers.<\/p>\n\n\n\n
2. What happens if a CIC\u2019s investment value drops below 90% due to market volatility?<\/strong><\/p>\n\n\n\nThe 90% criteria is calculated based on the \u201cbook value\u201d of the investments, not the current market value. This protects the CIC\u2019s regulatory status from being revoked simply because of a temporary dip in the stock market.<\/p>\n\n\n\n
3. Is a CIC allowed to provide guarantees for group companies?<\/strong><\/p>\n\n\n\nYes. Providing guarantees or acting as a partial credit enhancer for loans taken by group companies is a permitted activity. However, these guarantees are factored into the \u201cOutside Liabilities\u201d calculation for the 2.5x leverage ratio.<\/p>\n\n\n\n
4. Can a CIC invest in a startup that is not yet a \u201cgroup company\u201d?<\/strong><\/p>\n\n\n\nA CIC can technically invest in any entity, but if that investment doesn\u2019t meet the \u201cgroup company\u201d definition (usually requiring at least 26% voting rights), it counts toward the 10% limit of non-conforming assets. Exceeding this 10% risks the company being reclassified as a standard NBFC-Investment and Credit Company (ICC).<\/p>\n\n\n\n
5. Are there restrictions on the \u201cTwo-Layer\u201d rule for overseas structures?<\/strong><\/p>\n\n\n\nThe restriction on two layers of CICs applies specifically to the Indian dynamic. If a CIC invests in an operating subsidiary abroad that further has its own step-down subsidiaries, those operating layers usually do not count toward the \u201ctwo-layer\u201d restriction aimed at holding companies.<\/p>\n\n\n\n
Also Read:<\/strong> Step-by-Step Guide to RBI License Requirements 2026<\/a><\/p>\n\n