RBI Approves Tata Capital’s Conversion into NBFC-ICC From NBFC-CIC

Current Context: The Reserve Bank of India (RBI) has approved Tata Capital’s conversion from a Non-Banking Financial Company-Core Investment Company (NBFC-CIC) to a Non-Banking Financial Company-Investment Credit Company (NBFC-ICC).

• This change follows the merger of Tata Capital with Tata Cleantech Capital and Tata Capital Financial Services.
• This transformation signifies Tata Capital’s shift to an operating company, paving the way for its potential listing.
• The RBI has also classified Tata Capital and its parent company, Tata Sons, as NBFCs with an upper layer distinction, requiring both companies to go public by September 2025.

Question:

1 What change has the Reserve Bank of India (RBI) approved for Tata Capital?

• A) Conversion from a bank to an NBFC
• B) Conversion from a Non-Banking Financial Company-Core Investment Company (NBFC-CIC) to a Non-Banking Financial Company-Investment Credit Company (NBFC-ICC)
• C) Merger with Tata Sons
• D) Conversion into a full-fledged commercial bank

Answer: B) The RBI approved Tata Capital’s conversion from a Non-Banking Financial Company-Core Investment Company (NBFC-CIC) to a Non-Banking Financial Company-Investment Credit Company (NBFC-ICC). This indicates a shift in its operational focus.