Jio Financial Services Seeks RBI Approval to Shift from NBFC to Core Investment Company

22 Nov 2023 , 03:13 PM

Jio Financial Services, the demerged entity of Reliance Industries, applies to the Reserve Bank of India (RBI) for a conversion from a non-banking financial company (NBFC) to a core investment company (CIC) as per regulatory guidelines.

The application is in accordance with the RBI mandate following the demerger from Reliance Industries, aiming to modify its shareholding pattern and control.

Core Investment Companies (CIC) are defined by the RBI as entities predominantly investing in their group companies, primarily in equity, preference shares, or other financial instruments.

CICs are passive holding companies with the main purpose of maintaining control over group companies, and they do not engage in other financial activities.

The RBI specifies conditions, including holding not less than 90% of net assets in group company investments, restrictions on trading these investments, and limitations on financial activities, except for certain specified purposes.

Jio Financial Services refutes reports of planning to raise funds through bond issuance, dismissing a Reuters claim that it could raise up to Rs 10,000 crore in the March quarter.

The company emphasizes compliance with SEBI regulations and disclosure requirements, stating it will continue to make necessary disclosures. In the September quarter, Jio Financial Services reported a 101% sequential increase in net profit, while interest income declined by 8.6%.

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