Direct Tax
Consulting
ESG Advisory
Indirect Tax
Growth Advisory
Internal Audit
BFSI Audit
Industry Audit
Valuation
RBI Services
SEBI Services
IRDA Registration
AML Advisory
IBC Services
NBFC Compliance
IRDA Compliance
Finance & Accounts
Payroll Compliance Services
HR Outsourcing
LPO
Fractional CFO
General Legal
Corporate Law
Debt Recovery
Select Your Location
The proposal to ease share buyback norms for NBFC is expected to be presented at the regulator’s board meet. The regulator of Capital market i.e. SEBI is likely to ease its norms for buy-back of shares by Listed Companies.
Table of Contents
The main reason behind the proposal is the liquidity crisis hitting the Non-Banking Financial Companies, Housing Finance Companies, SEBI might ease the share buy-back norms for these.
Once the proposal approves, the below-mentioned points are required to be implemented-
Note: In case of listed companies – The share buy-back procedure is regulated under
I. Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018.
II. Companies Act, 2013[1].
However, the debt-equity ratio for the government companies carrying Non-banking financial and housing finance activities is 6:1.
Exception–There are Companies for which a higher ratio has been notified under the Companies Act, based on both standalone and consolidated basis.
Buybacks would still be allowed if the debt to equity ratio does not exceed 2:1, in case of standalone basis, but exceeds this threshold on a consolidated basis, i.e. if the consolidated ratio is up to 2:1 after excluding the subsidiaries that are NBFCs and housing finance companies regulated by RBI or National Housing Bank.
However, in any case, the standalone debt to equity ratio of all such excluded subsidiaries should not exceed 5:1.
However, the regulator felt it difficult to enforce the proposed rating requirement as it would be difficult to prescribe and enforce the same due to practical implementation challenges such as dynamic changes in ratings, tenure of ratings and difference in ratings of short-term and long-term instruments.
As a result, SEBI has decided not to exclude the regulated subsidiaries with AAA ratings for computing the debt-equity ratio on a consolidated basis
Taking into consideration the loopholes of NBFCs and HFCs, SEBI has proposed to bring the stringent regulations for liquid mutual funds and to ease share buyback norms for NBFC.
Read More: What are the different types of NBFC and how they differ from each other?.
A joint venture is a strategic business arrangement in which two or more companies collaborate...
With the rising inflation rates and various other economic factors, wealthy Americans are incre...
Before approaching the new suppliers or any other third parties, you should always go for the v...
With the increasing landscape of Fintech Companies, it is increasingly vital that fintech compl...
This blog gives a detailed description through an audit report for industrial waste by examinin...
Are you human?: 6 + 4 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
RBI is looking at “how Non-Banking Financial companies and Housing Finance Companies set their lending price for...
26 Jun, 2020
In recent years, RBI disclosed and displayed publically that the NBFC AA (Account Aggregator) network is a financia...
30 Mar, 2024
Chat on Whatsapp
Hey I'm Suman. Let's Talk!