18 October 2014
Restriction on investment through 2 layers of investment companies even applies to an NBFC but the remaining sub-sections of section 186 do not apply to an NBFC.
Except the provisions relating to two layers of investment companies, none of the other provisions of section 186 are applicable to the following cases of investments:
(a) To any acquisition made by a registered NBFC whose principal business is acquisition of securities in respect of its investment activities. It may be noted that the exemption is only available to an NBFC which is registered with the RBI.
(b)To any acquisition made by a company whose principal business is the acquisition of securities. Such companies could be NBFCs
18 October 2014
If the NBFC is a Financing Company and not Investment Company,whether proviso to section 186(11)(b)is applicable to it also. Reproduced below the said provisions: (b) to any acquisition — (i) made by a non-banking financial company registered under Chapter IIIB of the Reserve Bank of India Act, 1934 (2 of 1934) and whose principal business is acquisition of securities: Provided that exemption to non-banking financial company shall be in respect of its investment and lending activities.
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