Article discusses The procedure of acquisition/ transfer of control of NBFC, The requirement of prior approval of Reserve Bank for Acquisition/ Transfer of Control of NBFC, Application for prior approval for Acquisition/ Transfer of Control of NBFC and requirement of Prior Public Notice about change in control/ management of NBFC.
1. Do the due diligence of the target company. (optional)
2. Sign MOU with token money.
3. Submission of Documents for prior approval to the nearest zonal office of the RBI for Acquisition/Transfer of management or control of shareholders
4. Public notice of at least 30 days shall be given before effecting the sale of, or transfer of the ownership by sale of shares, or transfer of control, whether with or without the sale of shares.
5. After the passing of 30 days from the date of the public notice, the process of Acquisition/Transfer of NBFC shall be done.
The prior written permission of the Reserve Bank shall be required for
1. NBFCs shall submit an application, in the company letterhead, for obtaining prior approval of the RBI, along with the following documents.
2. Applications in this regard may be submitted to the Regional Office of the Department of Non-Banking Supervision in whose jurisdiction the Registered Office of the NBFC is located.
3. Public notice of at least 30 days shall be given before effecting the sale of, or transfer of the ownership by sale of shares, or transfer of control, whether with or without the sale of shares. Such public notice shall be given by the NBFCs and also by the other party or jointly by the parties concerned, after obtaining the prior permission of the Reserve Bank.
4. The public notice shall indicate the intention to sell or transfer ownership/ control, the particulars of transferee and the reasons for such sale or transfer of ownership/ control. The notice shall be published in at least one leading national and in one leading local (covering the place of registered office) vernacular newspaper.
It is very much important to note that the above said procedures and provisions shall be in addition to, and not in derogation of the provisions of any other laws, rules, regulations or directions, for the time being in force.