Please note that Reserve Bank of India (“RBI”) has, on July 10, 2020, amended the “Master Direction – Exemptions from the provisions of RBI Act, 1934” (“Master Direction”) to provide for the exemption to Alternate Investment Fund Companies from the provisions related to Non-Banking Financial Companies (“NBFCs”).
As per the extant law, venture capital fund companies, which were holding a certificate of registration under Section 12 of the Securities and Exchange Board of India Act, 1992 and not holding or accepting public deposit, are exempted from the provisions of Sections 45-IA and 45-IC of the RBI Act, 1934 and also from the applicability of guidelines issued by the RBI for NBFCs.
However, in pursuance of the repeal of Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996 and enactment of Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, RBI has now given effect to such changes in the Master Direction by substituting ‘venture capital fund companies’ with ‘Alternative Investment Fund Companies’ in exercise of the powers conferred under section 45NC of RBI Act, 1934.
Source: luthra
