Core Investment Companies
                     CORE
 INVESTMENT
 
COMPANIES


CORE INVESTMENT COMPANIES (CIC)
A Core Investment Company (CIC) is categorized as 
a Non Banking Financial Company (NBFC) by the 
Reserve Bank of India (RBI). These companies 
predominately invest in shares of its own group 
companies for stakeholding but cannot engage in 
trading of these instruments or carry out any other 
kind of financial activity. Core Investment 
Companies, (CIC) are those companies which have 
their assets predominantly as investments in 
shares for holding stake in group companies but 
not for trading, and also do not carry on any other 
TYPEs OF NBFCs
financial activity. These companies a minimum 90% 
of their assets in the group concerns either in the 
form of equity, preference shares or convertibles 
bonds or loans. Further the component of equity 
holdings should not be less than 60% of their 
assets.

DIRECTIONS BY RBI AS PER 2016
As per Core Investment Companies (Reserve 
Bank) Directions, 2016 issued by RBI, Core 
Investment Company (CIC) is a non-banking 
financial company carrying on the business of 
acquisition of shares and securities and which 
satisfies the following conditions as on the 
date of the last audited balance sheet:-
1. It holds not less than 90% of its net assets 
in the form of investment in equity shares, 
preference shares, bonds, debentures, debt 
or loans in group companies;
2. It does 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
3. Its investments in the equity shares (including instruments compulsorily convertible into equity 
shares within a period not exceeding 10 years from the date of issue) in group companies and units 
of Infrastructure Investment Trust only as sponsor constitute not less than 60% of its net assets as 
mentioned in clause (i) above; Provided; that the exposure of such CICs towards InvITs shall be 
limited to their holdings as sponsors and shall not, at any point in time, exceed the minimum holding 
of units and tenor prescribed in this regard by SEBI (Infrastructure Investment Trusts) Regulations, 
2014, as amended from time to time.
4. It 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:
(a) investment in
(i) bank deposits,
(ii) money market instruments, including money market mutual funds and liquid mutual funds
(iii) government securities, and
(iv) bonds or debentures issued by group companies,
(b) granting of loans to group companies and
(c) issuing guarantees on behalf of group companies.

CATEGORIES OF CICs
None of the Core Investment companies 
can accept deposits. This is one of the 
basic eligibility criteria of a Core 
Investment Company. The asset 
classification norms for CIC's are:-
•     Registered CIC’s with assets less 
than Rs. 100 crore worth follow the 
norms specified in the Non-
Systematically Important NBFC 
Prudential Norms, 2015.
• For those with assets more than Rs. 
100 core follows the norm as specified 
in Systematically Important NBFC 
Prudential Norms Directions, 2015.

systemically important core investment companies
RBI has now recognized that such CICs justifiably deserve 
a differential treatment in the regulatory prescription 
applicable to Non-Banking Financial Companies which are 
non deposit taking and systemically important.  
It is now decided by RBI that only those CICs having an 
asset size of Rs.100 crore and above would be treated as 
systemically important core investment companies. 
Systemically important core Investment Company means 
a Core Investment Company fulfilling both the following 
conditions:
1.     Having total assets of not less than Rs.100 crore, 
either individually or in aggregate along with other 
Core Investment Companies in the Group;
2. Raises or holds public funds;
rules covering systemically important cics
1.  They would require registration with the Reserve 
Bank and would be given exemption from 
maintenance of net owned fund and exposure 
norms subject to certain conditions.
2. Capital Requirements:  Every CIC-ND-SI shall 
ensure that at all times it maintains a minimum 
Capital Ratio whereby its Adjusted Net Worth shall 
not be less than 30% of its aggregate risk weighted 
assets on balance sheet and risk adjusted value of 
off-balance sheet items as an the date of the last 
audited balance sheet as at the end of the financial 
year.
3. Leverage Ratio:  Every CIC-ND-SI shall ensure that 
its outside liabilities at all times shall not exceed 
2.5 times its Adjusted Net Worth as on the date of 
the last audited balance sheet as at the end of the 
financial year.

EXHEMPTIONS TO THE RULES
A CIC-ND-SI which adheres to the 
requirements regarding capital 
requirements and leverage ratio as 
specified above, may to the extent 
necessary, be exempted from compliance 
with:-
•  Maintenance of statutory minimum Net 
Owned Fund (NoF) 
• Requirements of “Non-Banking Financial 
(Non-Deposit Accepting or holding) 
Companies Prudential Norms (Reserve 
Bank) Directions, 2007” including 
requirements of capital adequacy and 
exposure norms.
APPROVAL REQUIREMENT FOR CIC
CIC's with asset size of Rs. 100 crore or more are treated as systemically important Core 
Investment Company (CIC-ND-SI) by RBI. All Core Investment Companies are required to be 
registered with the Reserve Bank of India under section 45 IA of the RBI Act 1934 and 
thereby obtain a Certificate of Registration.
Exemptions from Registration:
•   CIC’s that have an asset size of less than Rs. 100 crore are exempted from registration 
as per the Act – the aggregate asset size of a Core Investment Company is calculated by 
totaling individual sizes of all the CIC’s belonging to a particular group. In case the total 
asset size is Rs. 100 crore or more the Core Investment Company has to register.
• CIC’s that are worth Rs. 100 crore or more but are not accessing public funds are 
exempted.
However, it is important to note here that such CIC’s that have asset size below Rs. 100 
would be required to mandatorily register with RBI in case they are planning to make 
overseas investments in the financial sector. if the particular Core Investment Company is 
investing overseas in the non-financial sector, it does not require to be registered with RBI.
GENERAL OBLIGATION FOR A CIC
As per the Core Investment Companies (Reserve Bank) 
Directions, 2016, the following need to be fulfilled by all CICs, as 
per the last audited balance sheet:-
1. The Core Investment Company needs to hold not less than 
90% of its net assets in the form of investment in equity 
shares, preference shares, bonds, debentures, debt or loans in 
group companies. The balance 10% of Net assets that the 
CIC’s can hold outside the group include real estate or other 
types of fixed assets that are essential for running the 
company but cannot be financial investments or loans in non-
group companies.
2. It cannot trade in its investments in shares, bonds, 
debentures, debt or loans in group companies except through 
block sale with the purpose of diluting or disinvestment.
3. The investment of the company in the shares of the group 
companies need to be at least 60% of the net worth of its 
assets. 
The Core Investment Company is not allowed to carry out any other 
financial activity other than:-
• The company can issue guarantees on behalf of group companies.
• It can invest in bank deposits; money market mutual fund, liquid 
mutual funds, and other money market instruments; government 
securities; bonds and debentures of group companies;  and 
granting of loans to group companies.
A CIC-ND-SI that is a systematically important Core 
Investment Company needs to have an asset size of Rs. 
100 crore and more, should raise or hold public funds as 
well as fulfill all the criteria stated above. For such a 
company, it is mandatory to be registered with the 
Reserve Bank of India as operating without obtaining a 
Certificate of Registration from the apex bank; they are 
viewed as violating the Core Investment Companies 
(Reserve Bank) Directions, 2016.
REGISTRATION 
PROCESS
PROCESS OF REGISTRATION
1.  The Core Investment Company needs to 
download the application form for 
registration from the website of RBI.
2. It needs to be filled in and submitted to the 
Regional Office of DNBS (Department of Non-
Banking Supervision) along with the 
supporting documents as mentioned in the 
form. The DNBS has to be the one under 
whose jurisdiction the company is 
registered.
The CIC's that are exempted from registration, 
however, need to pass a Board Resolution that 
they will not in the future indulge in accessing 
public funds. 
CAPITAL 
REQUIREMENT OF 
CIC

CAPITAL REQUIREMENT
•  The adjusted net worth (ANW) of 
the CIC-ND-SI cannot be less than 
30% of the risk-weighted assets 
(RWA).
• In situations where the aggregate 
asset size is calculated, it is 
required that all the CIC’s within 
the group need to be registered as 
individual CIC-ND-SI, the adjusted 
net worth being applied 
individually.
RBI's MEASURES TO STRENGTHEN CORE INVESTMENT 
COMPANIES
With an objective to strengthen core investment 
companies (CIC), a working group formed by the 
Reserve Bank of India recommended measures such 
as including periodical inspection of the companies 
and formation of board-level committees.The working 
group recommended capital contribution by core 
investment companies (CIC) in a step down CIC, over 
and above 10 per cent, should be deducted from its 
adjusted net worth.
A core investment company is a non-banking 
financial company (NBFC) which carries on the 
business of acquisition of shares and securities and 
holds not less than 90 per cent of its net assets in the 
form of investment in equity shares, preference 
shares, bonds, debentures, debt or loans in group 
companies. Further investments in equity shares in 
group companies constitute not less than 60 per cent 
of its net assets.

RBI's MEASURES TO STRENGTHEN CORE INVESTMENT COMPANIES
 CONTINUED
It also proposed that every group having a CIC should 
have a group risk management committee.
The RBI panel also recommended onsite inspection of 
core investment companies may be conducted 
periodically.
“Annual submission of statutory auditors certificates 
may also be mandated,” it said.
The working group (WG) in its report also added that 
corporate governance guidelines are not explicitly 
made applicable to CICs at present. To strengthen the 
governance practices, the WG recommends 
constitution of board-level committees viz. audit 
committee, nomination and remuneration committee 
and group risk management committee.
THANK YOU