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RBI Tightens Investment Rules For Shadow Banks From Non-FATF Compliant Jurisdictions

  • calendar 13-Feb-2021
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RBI Tightens Investment Rules For Shadow Banks From Non-FATF Compliant Jurisdictions

Reserve Bank of India said on Friday new investors who operate from jurisdictions not in compliance with the Financial Action Task Force (FATF) must hold less than 20% of the voting power in non-banking finance companies (NBFCs). In a bid to stop money laundering, the Reserve Bank of India (RBI) said investors from non-FATF compliant jurisdictions would not be treated on a par with those from other countries or regions. "New investors from or through non-compliant FATF jurisdictions, whether in existing NBFCs or in companies seeking Certification of Registration (COR), should not be allowed to directly or indirectly acquire 'significant influence' in the investee, as defined in the applicable accounting standards," the RBI said.

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