RBI & SEBI to Strengthen the Indian Capital Market

The RBI, like the stock market regulator SEBI, is getting strict with the wrongdoers. This time it is the turn of holding companies. As per a leading business daily, the RBI has introduced a regulation that will limit the amount that can be borrowed by core investment companies that operate as holding companies. We see this impacting several large business houses. This is given that this regulation will restrict borrowings by several large companies and force them to revamp their ownership structures. RBI has also said that holding companies must ensure that their outside liabilities do not exceed 2.5 times their adjusted net worth. This restricts such companies from borrowing outside the group.