A NBFC carrying on the business of acquisition of shares and securities which satisfies the following conditions:- 1)It holds not less than 90% of its total assets in the form of investment in equity shares, debt or loans in group companies.

2)Its investment in the equity shares ( including instruments compulsorily convertible into into equity shares within a period not exceeding 10 years from the date of issue) in group companies constitutes not less than 60% of its total assets.

3)It does not trade in its investment in shares, loans, or debt in group companies except through block sale for the purpose of delusion or disinvestment.

4)It does not carry on any other financial activity referred to in section 451(c) and 451(f) of the RBI Act, 1934 except investment in bank deposits, money market instruments, government securities, loans to and investment in debt issuances of group companies or guarantees issued on behalf of group companies.

Here RBI is regulated with the responsibility of regulating and supervising the Non Banking Financial Companies (NBFC) by virtue of power vested in the RBI Act, 1934. The regulatory and supervisory objective is to :-

• Ensure healthy growth of Financial Companies

• The quality of surveillance and supervision exercised by the banks over the NBFC is sustained by keeping pace with the developments.

A systemically important core investment company is a Non banking Financial Companies:-

• Asset size of the company should be 100 Crores or more.

• Carrying on the business of acquisition of shares and securities and which satisfies the following conditions as on the date of the last audited Balance sheet.

• It holds not less than 90% of its net assets in the form of investment in equity shares, preference share, Bonds, Debentures, debt or loans in group companies.

• Its investment in the equity shares ( including instruments compulsorily convertible into into equity shares within a period not exceeding 10 years from the date of issue) in group companies constitutes not less than 60% of its net assets as mentioned in the clause.

• It does not trade in investment in shares, bonds, debentures, debt or loans in group companies except through block sale for the purpose of delusion or disinvestment.

• It accepts public funds.