Jio Financial Services embarks on strategic transformation: Aiming for CIC status with RBI approval 

Jio Financial Services Ltd, a non-banking financial company (NBFC), has disclosed that, in accordance with the Reserve Bank of India’s directive during the approval process for the shift in shareholding pattern and control following the demerger of the financial services business from Reliance Industries Limited to the company, it has submitted an application for the conversion of its status from NBFC to CIC.

What is NBFC?

NBFCs are financial institutions that offer various banking services like loans, advances, acquisition of shares, stocks, bonds, securities issued by government or other marketable securities, leasing, hire-purchase, and insurance business, but do not hold a banking license like traditional banks. They play a crucial role in providing financial services to segments typically underserved by banks and help in the growth of the economy by offering diverse financial products and services.

What is CIC?

CIC stands for Core Investment Company. It is a category of non-banking financial company (NBFC) in India. Core investment companies are primarily engaged in the business of making investments in the form of equity or loans in group companies for the purpose of holding a significant stake and exercising control over these entities.

Unlike other NBFCs, CICs are regulated by the Reserve Bank of India (RBI) and are subject to specific guidelines. The primary function of a core investment company is to act as an investment vehicle within a group of companies, providing a structure for holding and managing investments. The RBI imposes regulations on their capital adequacy, exposure norms, and governance to ensure financial stability and prudence in their operations.

About Jio Financial Services

Jio Financial Services, a systematically important non-deposit-taking Non-Banking Financial Company authorized by the Reserve Bank of India, is poised to function as a holding entity. Its financial services operations will be carried out through distinct consumer-facing subsidiaries, including Jio Finance Limited (JFL), Jio Insurance Broking Limited (JIBL), and Jio Payment Solutions Limited (JPSL). Additionally, in collaboration with its joint venture partner, it will manage financial services through Jio Payments Bank Limited (JPBL).

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.