India: RBI tightens rules for NBFCs funding IPOs

India: RBI tightens rules for NBFCs funding IPOs

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The Reserve Bank of India on Friday announced a limit on non-bank lenders financing subscriptions to initial share sales to stem the flow of large amounts of borrowed capital by high net worth individuals to such offerings.

“There shall be a ceiling of 1 crore per borrower for financing subscription to initial public offer (IPO). NBFCs can fix more conservative limits,” RBI said in its revised regulatory framework for non-banking financial companies (NBFCs). The new rule will be effective 1 April.

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