With corporate group structures becoming more complex and layered, the Reserve Bank of India (RBI) has now set up a working group to review the regulatory and supervisory framework for core investment companies (CICs).

“Over the years, corporate group structures have become more complex involving multiple layering and leveraging, which has led to greater inter-connectedness with the financial system through their access to public funds. Further, in light of recent developments, there is a need to strengthen the corporate governance framework of CICs,” the RBI said on Wednesday.

The six-member working group, which will be headed by Tapan Ray, Non-Executive Chairman, Central Bank of India, and former Secretary, Ministry of Corporate Affairs, will examine the current regulatory regime for CICs and suggest changes to the current approach for their registration, including the practice of multiple CICs being allowed within a group.

Additionally, it will also suggest measures to strengthen corporate governance and disclosure requirements for CICs and assess the adequacy of supervisory returns submitted by these entities.

The working group has also been tasked with recommending appropriate measures to enhance RBI’s off-sight surveillance and on-site supervision over CICs.

“The working group shall submit its report by October 31, 2019,” the RBI said.

Other members of the working group include Lily Vadera, Executive Director, RBI; Amarjeet Singh, Executive Director, SEBI; T Rabishankar, Chief General Manager, Financial Markets Regulation Department, RBI; HK Jena, Deputy Managing Director, State Bank of India, and NS Venkatesh, Chief Executive, Association of Mutual Funds in India.

The RBI had in August 2010 introduced a separate framework for the regulation of systemically important CICs after recognising the difference in the business model of a holding company compared to other non-banking financial companies.

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