Where a non-NBFC mergers with an NBFC, prior written approval of the Reserve Bank would be required if such a merger satisfies any one or all of the conditions viz., (i) any change in control in the NBFC due to merger, (ii) any change in the shareholding of the NBFC consequent to the merger which would result in change in shareholding of 26% or more of the paid up equity capital of the NBFC, (iii) any change in the management of the NBFC which would result in change in more than 30% of the directors, excluding independent directors. It may be noted that the NBFC shall continue to fulfil the Principal Business Criteria (i.e., 50-50 criteria) after merger to be eligible to hold the Certificate of Registration as an NBFC.

The NBFCs being amalgamated will require to obtain prior written approval of the Reserve Bank. Depending upon the nature of amalgamation/merger proposal, requisite approvals as per regulations needs to be sought.

Yes, prior approval of the Reserve Bank would have to be obtained before approaching any Court or Tribunal seeking orders for merger/ amalgamation involving NBFCs, including all such cases which would ordinarily fall under the scenarios explained in FAQs 84, 85 or 86.