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The central bank says there is a need to strengthen the corporate governance framework of CICs The Reserve Bank Wednesday said it has constituted a working group that will review the

regulatory and supervisory framework for core investment companies. In August 2010, RBI had introduced a separate framework for the regulation of systemically important core investment

companies (CICs), recognising the difference in the business model of a holding company relative to other non-banking financial companies. "Over the years, 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. It will also assess the appropriateness of and suggest changes to the current

approach of RBI towards registration of CICs including the practice of multiple CICs being allowed within a group. The working group will also 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 October 31, 2019, it added. CICs are non-banking financial companies with asset size of Rs 100 crore and above

which carry on the business of acquisition of shares and securities, subject to certain conditions. CICs, which are allowed to accept public funds, hold not less than 90 per cent of their

net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies.