Jio Financial Services Ltd. announced today that it has received approval from the Reserve Bank of India (RBI) to convert from a Non-Banking Financial Company (NBFC) to a Core Investment Company (CIC). This approval comes after the company applied for the conversion in November last year, following the demerger of the financial services business from Reliance Industries.
A Core Investment Company is a specialized NBFC with an asset size greater than ₹100 crore. According to the RBI’s circular dated December 20, 2016, the primary function of a CIC is the acquisition of shares and securities, subject to specific conditions. A CIC must hold at least 90% of its net assets in the form of investments in equity shares, preference shares, bonds, debentures, debt, or loans in group companies. All CICs with assets exceeding ₹100 crore are regulated by the RBI.
The approval marks a significant milestone for Jio Financial Services, enabling it to focus on its core investment activities within the regulatory framework set by the RBI. The company’s transition to a CIC will streamline its operations, aligning its investment strategies with the regulatory requirements and enhancing its ability to manage its investments in group companies effectively.
This strategic move is expected to bolster Jio Financial Services’ position in the financial sector, providing it with the flexibility to optimize its investment portfolio and contribute to the growth of its group companies.