New Delhi, July 4 (KNN) The Reserve Bank of India (RBI) has constituted a working group that will review the regulatory and supervisory framework for Core Investment Companies (CICs) as the existing framework is not suitable to handle the complex corporate governance structures that the companies have now become.

RBI had introduced a separate framework for the regulation of systemically CICs In August 2010, recognizing the difference in the business model of a holding company relative to other non-banking financial companies.

CICs are holding companies of non-banking financial companies (NBFCs). Over time, “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,” RBI said in a release.

The Central Bank said there is a need to strengthen the corporate governance framework of CICs.

The six-member working group is to be headed by Tapan Ray, non-executive chairman, Central Bank of India and former secretary, Ministry of Corporate Affairs.

The terms of reference of the working group include examination of the current regulatory framework for CICs in terms of adequacy, efficacy and effectiveness of every component thereof and suggest changes therein.

The working group will suggest measures to strengthen corporate governance and disclosure requirements for CICs; assess the adequacy of supervisory returns submitted by CICs; and suggest appropriate measures to enhance RBI's off-sight surveillance and on-site supervision over CICs. The working group shall submit its report by 31 October 2019, it added.

CICs are non-banking financial companies with asset size of 100 crore and above which carry on the business of acquisition of shares and securities, subject to certain conditions. They are allowed to accept public funds, hold not less than 90% of their net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies.