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Investment Chart

Core Investment Company

Core Investment companies are companies who hold shares, bonds debentures and is categorized as NBFCs by the RBI.

CIC is a non-banking financial company who carries business acquisition of shares and securities.

Key features of the company are:

At least 90% of its total assets should be in form of investment of any of the listed i.e. equity shares, preference shares, debentures, debt, or loan in the group.

At least 60% of its net assets should be in form of investment in the equity shares as of the date of the last audited balance sheet.

It should not trade in its own investment in form of shares, bonds, debentures, or debt or loan in its own group companies, except through block safe for dilution or disinvestment

It carry out any activity mentioned in section 45-1(C) and 45-1(F) of the RBI Act, except investing in-

  • Bank Deposits

  • Money Market Instruments

  • Government Securities

  • Guarantees Issued on behalf of Group Companies

  • Bonds or Debentures issued by Group Companies /Loans to Group Companies

What are the types of Core Investment Company?

Basically, any Core Investment Company can be categorized in one of the below-mentioned types:

  • CIC-ND-NSI

  • CIC-ND-SI

Document Required

In the registration process of the company, the following documents:

RBI mentions a comprehensive list of all the documents to register itself as CIC , nearly 52 documents are required but still that itself is not an exhaustive list, RBI may ask for other necessary documents , if required.

  1. Details of access to Public Funds.

  2. Application to be submitted in two separate sets tied up properly in two separate files and properly page numbered.

  3. Identification particulars (Annex I).

  4. Statement on prudential norms (Annex II).

  5. Details of change in the management of the company during last financial year till date if any and reasons thereof.

All documents/information is to be submitted in duplicate.

An indicative list of basic documents/information to be furnished along with the application. All documents/information is to be submitted in duplicate Requirements to be complied with and documents to be submitted to RBI by Companies for obtaining certificate and Registration from RBI as Core Investment Company (CIC)

  • Details of access to Public Funds.

  • If the company does not have public funds but intends to access public funds anytime in the future and therefore applying for the CoR, they have to submit the Board Resolution to the effect that they intend to raise resources through public funds at a future date.

  • Application to be submitted in two separate sets tied up properly in two separate files and properly page numbered.

  • Identification particulars (Annex I).

  • Statement on prudential norms (Annex II).

  • Information about the management (Annex III)

  • Details of change in the management of the company during last financial year till date if any and reasons thereof.

  • Certified copies of Certificate of Incorporation and Certificate of Commencement of Business in case of public limited companies.

  • Certified copies of up-to-date Memorandum and Articles of Association of the company.

  • Details of clauses in the memorandum relating to financial business.

  • Details of changes in the Memorandum and Articles of Association duly certified.

  • Copy of PAN/CIN allotted to the company.

  • Annex II to be submitted duly signed by the director/Authorized signatory and certified by the statutory auditors.

  • Annex III (directors’ profile) to be separately filled up and signed by each director. Care should be taken to give details of bankers in respect of firms/companies/entities in which directors have a substantial interest.

  • In case the directors are associated with or without substantial interest (indicate %of holding in each company firm) in other companies, indicate clearly the activity of the companies and details of their regulators if any.

  • Certificate from the respective NBFC/s where the Directors have gained NBFC experience.

  • Copy of PAN and DIN allotted to the Directors.

  • CIBIL Data pertaining to Directors of the company

  • Financial Statements of the last 2 years of Unincorporated Bodies, if any, in the group where the directors may be holding directorship with/without substantial interest.

  • Certificate of compliance with section 45S of Chapter IIIC of the RBI Act, 1934 regarding unincorporated bodies with which director/s of the company are associated.

  • Whether any prohibitory order was issued in the past to the company or any other NBFC/RNBC with which the directors/promoters etc. were associated? If yes, details thereof.

  • Whether the company or any of its directors was/is involved in any criminal case, including under section 138(1) of the Negotiable Instruments Act? If yes, details thereof.

  • Board Resolution specifically approving the submission of the application and its contents and authorizing signatory.

  • Board Resolution to the effect that the company has not accepted/solicited any public deposit and will not accept the same in the future without the prior approval of the Reserve Bank of India in writing.

  • Board resolution stating that the company was not trading/ will not trade in its investments in shares, bonds, debentures, debt, or loans in group companies except through block sale for the purpose of dilution or disinvestment.

  • Board resolution stating that the company does not carry on any other financial activity referred to in Section 45I(c) and 45I(f) of the Reserve Bank of India Act, 1934 except investment in

i) bank deposits,

ii) money market instruments, including money market mutual funds

iii) government securities, and

iv) bonds or debentures issued by group companies,

v) granting of loans to group companies and

vi) issuing of guarantees on behalf of group companies.

  • Certified copy of Board resolution for the formulation of “Fair Practices Code”

  • Statutory Auditors Certificate certifying that the company is/does not accept/is not holding Public Deposit.

  • Statutory Auditors Certificate certifying that the company had not traded, during the year in its investments in shares, bonds, debentures, debt, or loans in group companies except through block sale for the purpose of dilution or disinvestment.

  • Statutory Auditors Certificate certifying that the company does not carry on any other financial activity referred to in Section 45I(c) and 45I(f) of the Reserve Bank of India Act, 1934 except investment in

i) bank deposits,

ii) money market instruments, including money market mutual funds

iii) government securities, and

iv) bonds or debentures issued by group companies,

v) granting of loans to group companies and

vi) issuing of guarantees on behalf of group companies.

  • Statutory Auditors Certificate certifying Average Market Price of quoted investments.

  • Statutory Auditors Certificate certifying the net asset size of the company.

  • Statutory Auditors Certificate certifying investment in group companies as a percent of its Net Assets.

  • Statutory Auditors Certificate certifying investments in equity shares (including instruments compulsorily convertible into equity shares within a period not exceeding 10 years from the date of issue) in group companies as a percent of its net assets

  • Details of Authorised Share Capital and latest shareholding pattern of the company including the percentages. Documentary evidence for change in shareholding pattern, if undergone. If there are any NBFC corporate shareholders, certificates from their statutory auditors regarding the adequacy of statutory NOF post-investment. Also, provide details about the line of activity of other corporate stakeholders.

  • Details of infusion of capital if any during the last financial year together with the copy of the return of allotment filed with Registrar of Companies.

  • Details of the bank balances/bank accounts/complete postal address of the branch/bank, loan/credit facilities, etc. availed.

  • Details of unsecured loans if any, raised by the company from others (including the directors) during the year and if these fall in the exempted category of Public deposits certified by the Auditor.

  • A certificate of Chartered Accountant regarding details of group/associate/subsidiary/holding/related companies is to be submitted.

 

(For the purposes of determining whether a company is a CIC/CIC-ND-SI, 'companies in the group" have been exhaustively defined in para 3(1) b of Notification No. DNBS.(PD) 219/CGM (US)-2011 dated January 05, 2011, as an arrangement involving two or more entities related to each other through any of the following relationships, viz; subsidiary parent (defined in terms of AS-21), Joint Venture (defined in terms of AS 27), Associate (defined in terms of AS 23), promoter-promotee (as provided in the SEBI-Acquisition of shares and takeover) Regulations, 1997) for listed companies, a related party (defined in

terms of AS 18) Common brand name, and investment in equity shares of 20% and above.)

  • Details should include names of the company, its activity, whether it is an NBFC or have other regulators like SEBI/IRDA/FMC/NHB/Foreign Regulators. If they are unregulated give the details of their activities, principal banker’s name, address, account no. Whether the names of these companies are appearing in the balance sheet of the applicant company. If not, indicate why they are not appearing. Whether overseas group companies were established under the general permission route or under approval from appropriate authority if any. If there are other NBFCs in the group, justification of having another NBFC.

  • Details of other CICs in the group. If they are not registered with the Bank, reasons for the same may be given. Justification of having another CIC in the group also should be provided.

  • Brief background note on the activities of the company during the last three years.

  • Last three years Audited balance sheet and Profit & Loss account along with directors & auditors report or for such shorter period as are available (for companies already in existence).

  • Business plan of the company for the next three years giving details of its (a) thrust of business; (b) market segment; and (c) projected balance sheets, Cash flow statement, asset/income pattern statement.

  • The Source of the startup capital of the company is substantiated with documentary evidence. (only for the new companies).

  • Details of mergers and acquisitions with/of other companies if any together with supporting documents.

  • Is the company engaged in any capital market activity? If so, whether there has been any non-compliance with SEBI Regulations? (Statement to be certified by Auditors).

  • Whether the company was granted any permission by FED to function as Full-fledged Money Changers? If so, copy of the RBI letter granting the permission.

  • If there is FDI in the company, its percentage (submit FIRC in support thereof) and whether it fulfills the minimum capitalization norms or not (also submit FC_GPRs).

(i) Has the FDI been brought in with FIPB approval (Copy of approval to be submitted)?

(ii) Is the foreign entity contributing the FDI subject to supervision in its home country (if yes, name, address, and email id of the regulator).

(iii) If not, mention legal status, viz, statutes under which it was established, its statutory obligations,   procedures under which it was established, whether listed on the stock exchange, etc. 

(iv)  The particulars of approval of Foreign Exchange Department (FED) if any obtained/copies of Foreign Inward Remittance Certificate in r/o Foreign Direct Investment if any, received by the applicant company are furnished.

(v) Activities are undertaken, details of regulator of group/associate companies doing financial activities which are regulated either in the home country or elsewhere, if any.

 (vi) If any group/ associate company is operating in India, details such as its activities, its partners or associates, regulator/s, etc. may be furnished.

  • Declaration by the company to own electronic infrastructure and its capability regarding electronic submission of data through the internet as and when required by Reserve Bank of India. Email id of the company should also be provided.

  • A company which is already in existence and whose (i) minimum Capital Ratio in terms of Adjusted Net Worth is less than 30% of its aggregate risk-weighted assets on the Balance Sheet and risk-adjusted value of off-balance sheet items as on the date of the last audited Balance Sheet, and/or (iii) a Leverage Ratio where its outside liabilities are exceeding 2.5 times its Adjusted Net Worth as on the date of the last audited Balance Sheet, as on the date of application, may also furnish a time-bound programme as to how it proposes to adhere to these requirements.

  • A company which proposes to become a CIC-ND-SI but does not qualify in terms of 90% of net assets under investments may also give a time-bound action plan as to how it would achieve such eligibility.

  • Are there are any incidents of non-compliance with the directions of Revenue Authorities or any other statutory authority by the applicant company, its holding company/ subsidiaries, If yes, give particulars, else report "Nil"

 

Note:

(1) The Above Checklist is indicative and not exhaustive. Bank can, if necessary, call for any further documents to satisfy themselves on the eligibility for obtaining registration as CIC.

 

(2) In the event of the Bank calling for further documents in addition to those mentioned above, the applicant company is supposed to respond within a stipulated time of one month failing which the original CoR application may be returned to the company for resubmission afresh with the required information/documents.

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