NBFC Takeover Services to Buy or Sell NBFC

In financial terms, the meaning of takeover is to purchase a business entity by another person. Either it could be a friendly takeover or could be a hostile takeover.

NBFC takeover is far easier than the fresh NBFC registration. Moreover, the NBFC takeover procedure has been simplified by the RBI due to which the takeover deal can be executed within 45 to 60 working days.

Prior approval from Reserve Bank of India (RBI) is required in the following circumstances:

• Any type of acquisition of control or takeover may or may not result in a change of the management.
• Any divergence in the shareholding, resulting in 26% acquisition or transfer of the NBFC paid-up equity capital, which includes any progressive increase over time.
• Any kind of amendment by the way of change in the management in more than 30% of the respective directors of the NBFC (excluding the independent directors).

Prior approval from the Reserve Bank of India (RBI) won’t be required in the following conditions:

• A 26 percent change in the company’s share capital that is a result of buyback of the shares or capital reduction by the approval of the competent court.
• A 30 percent change in the management due to the changes in the independent directors or by the rotation of the board directors.

Documents Required for NBFC Takeover

• Proposed shareholders or directors information
• Details of sources of funds raised by the proposed shareholders
• A statement by the shareholders or directors that states their non-association  with any kind of entity accepting deposits
• The Banker’s report of all the respective shareholders/directors
• A statement that states the non-association of all the proposed directors or shareholders with any entity that has been denied for the registration certificate by RBI.
• A statement that specifies that none of the proposed shareholder/directors is included in any of the criminal background as well as non-conviction under the negotiable instrument act of section 138.

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