(BS)
The Reserve Bank of India’s (RBI’s) working group set up to review the extant regulations on core investment companies (CICs) has favoured restricting the number of layers of such entities within a group to two by 2021. “Any CIC within a group shall not make investment through more than a total of two layers of CICs, including itself,” said the panel in its report. If the recommendation is implemented, it will cut down the room for leverage by companies.
Some were created to gain from tax shields and sops from government policies. Now, with rising non-performing assets, financiers (banks, fund houses, etc) have realised that they are not dealing with single balance sheet, but multiple balance sheets having less in assets, he said.Securities and Exchange Board of India (Sebi) guidelines on governance seek to avoid multiple structures.
