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Home / NBFC & Fintech / NBFC Takeover / Acquisition Advisory
Since November 2025, virtually every meaningful ownership or management change in an NBFC needs RBI’s prior written approval through the PRAVAAH portal — and there’s no provision for approval after the fact. CS Chetna Shoor structures the filing and transaction sequencing before anything is signed.
The Reserve Bank of India (Non-Banking Financial Companies – Acquisition of Shareholding or Control) Directions, 2025, effective November 28, 2025, replaced the earlier framework entirely and now govern every takeover, shareholding change, and management change across all NBFC layers. Three thresholds trigger mandatory prior approval: any takeover or acquisition of control regardless of shareholding change, any change in shareholding of 26% or more (including gradual increases over time), and any change in management resulting in more than 30% of non-independent directors being replaced. Crucially, the Directions explicitly rule out retroactive approval — a transaction closed before RBI signs off cannot be fixed after the fact.
This page is for buyers acquiring an existing NBFC, promoters restructuring or exiting their shareholding, and boards planning a management overhaul that touches more than 30% of directors. Chetna reviews whether your proposed transaction actually triggers the approval requirement, and structures the PRAVAAH filing and public notice sequence correctly before you sign anything binding.
Shareholding or voting-power change (cumulative) that requires prior RBI approval
Change in non-independent directors (cumulative, over a year) that requires prior approval
Takeover or acquisition of control always requires approval, even without a shareholding or management change
Public notice period required before the change takes effect
Voting-power cap on investors from FATF non-compliant jurisdictions
Mandatory filing portal under the Acquisition Directions, effective November 28, 2025
RBI rejects over 40% of NBFC applications on the first attempt. Here’s what actually causes it.
The Acquisition Directions 2025 explicitly rule out retroactive approval — a transaction that closes before RBI grants prior written permission is a compliance breach that can't be remedied by applying afterward. Deal timelines built around a target signing date without RBI's review window factored in routinely force a choice between delaying closing or breaching the Directions.
Both the 26% shareholding test and the 30% director-change test apply cumulatively — the shareholding test over time through progressive increases, and the director test over a rolling year. A series of individually small, seemingly innocuous changes can cross either threshold without anyone realizing until a later step tips it over.
RBI approval must come first, followed by a 30-day public notice in one national and one local newspaper, and only then can the transaction close. Issuing the public notice before approval, or closing before the notice period ends, creates a compliance gap RBI can act on independently of whether the underlying deal itself was sound.
“NBFC takeover” covers several different scenarios, each triggering the approval requirement differently.
Triggers the acquisition-of-control approval and, in most cases, the 26% shareholding test as well. Typically faster than fresh registration since the Certificate of Registration already exists, but it depends on clean due diligence into the seller's compliance history.
Triggers the 26% shareholding test the moment cumulative transfers cross that threshold — the same PRAVAAH filing applies even when the change is friendly and pre-agreed, not a hostile takeover.
Triggers the 30% director-change test on its own, and is often overlooked precisely because no shares are moving. If you're planning a significant board reshuffle, it's worth checking this threshold independently of any shareholding changes.
If there's no NBFC to take over yet, this isn't a takeover situation — see our NBFC Registration (RBI CoR) service for a fresh filing instead.
We confirm whether your proposed transaction meets any of the three approval thresholds, and flag it early if it doesn't — some restructurings don't need RBI approval at all.
A review of the target NBFC's compliance history and RBI standing, alongside what's needed from proposed shareholders and directors.
Chetna reviews the shareholder and director disclosures, source-of-funds documentation, and declarations before the application is finalized.
Submission of the application on the company's letterhead through RBI's PRAVAAH portal.
We respond to every RBI query directly as it comes in during the review period.
We coordinate the 30-day public notice in national and local newspapers, and confirm the transaction only closes after that notice period runs, in line with RBI's required sequence.
Approval and the public notice aren’t the end of the obligation — the NBFC’s ongoing compliance continues without interruption through and after the ownership change.
Informing RBI once the approved transaction has actually closed
Updated statutory registers and shareholding/director disclosures reflecting the new structure.
The ownership change doesn't pause these. See NBFC Annual RBI Compliance.
MCA/ROC filings for the share transfer or director changes under the Companies Act.
CS Chetna Shoor’s team replies within 4 hours on WhatsApp.
Prior written RBI approval is required for any takeover or acquisition of control of an NBFC, any change in shareholding resulting in acquisition or transfer of 26% or more of paid-up equity capital (including gradual increases over time), and any change in management resulting in more than 30% of non-independent directors being replaced — all under the RBI Acquisition of Shareholding or Control Directions, 2025, effective November 28, 2025.
The 26% threshold applies to cumulative acquisitions or transfers of paid-up equity capital, meaning a series of smaller share purchases that add up to 26% or more over time still triggers the approval requirement. A narrow exception applies where shareholding crosses 26% due to a buyback or court-approved capital reduction — in that case prior approval isn’t needed, but RBI must be informed within one month.
The threshold counts changes to non-independent directors only, calculated cumulatively over a rolling year — so a board that replaces directors in stages can still cross 30% even if no single change looks significant on its own. Independent directors, reappointments of existing directors, and re-elections following retirement by rotation are excluded from the count.
Acquiring an NBFC that already holds a valid Certificate of Registration skips the registration process entirely, but the acquisition-of-control approval still requires RBI review of the transaction, the proposed shareholders’ fit-and-proper standing, and the target’s compliance history. Whether it’s faster than fresh registration depends heavily on how clean that compliance history is — an NBFC with unresolved RBI findings can make an acquisition slower than starting fresh.
The Acquisition Directions 2025 make no provision for retroactive approval, so closing a transaction that required prior approval before RBI has granted it is a compliance breach in its own right, independent of whether the underlying deal was otherwise sound. This is why transaction timelines need to build in RBI’s review period from the outset rather than treating approval as a formality to be sorted out around signing.
Qualified Company Secretary · ICSI Member · Founder, Expertvuw Management Pvt Ltd
Chetna has guided NBFC promoters through RBI’s COR process end to end, with particular focus on structuring the Net Owned Fund and business plan so the application survives first-round RBI scrutiny rather than coming back with a query.