RBI Allows NUCFDC to Raise Equity from Over 200 Investors

Circular No. DoR.GOV.REC.No.414/18.10.008/2025-26; Dated: 26.02.2026

The Reserve Bank of India (RBI) has issued a direction permitting the National Urban Co-operative Finance and Development Corporation Limited (NUCFDC) to undertake private placement of equity shares to more than 200 persons in a financial year.

This permission is restricted to placements made exclusively to:

• Urban Co-operative Banks (UCBs), and
• National Co-operative Development Corporation (NCDC),

subject to compliance with specified regulatory conditions.

1. Key Conditions Prescribed by RBI

The approval granted by RBI is subject to the following conditions:

1.1 Board-Approved Resource Planning Policy

NUCFDC must have in place a Board-approved policy for resource planning to ensure structured and prudent capital raising aligned with its operational requirements.

1.2 Restricted Offerees

The offer or invitation for private placement of equity shares must be made only to UCBs and NCDC. No other category of investors is permitted under this relaxation.

1.3 Compliance by UCBs

The offer document must clearly state that participating Urban Co-operative Banks (UCBs) are required to ensure compliance with all applicable statutory and regulatory requirements issued by the RBI.

1.4 Prohibition on Lending Against Own Shares

NUCFDC must not extend any loan, advance, or other financial accommodation against the security of its own shares.

1.5 End-Use of Funds

The proceeds raised through share capital under these guidelines must be utilised strictly for purposes consistent with the mandate of NUCFDC, as approved by the Reserve Bank.

1.6 Compliance with Securities Regulations

NUCFDC must ensure compliance with all applicable statutory and regulatory requirements relating to private placement of securities, including relevant corporate and financial regulations.

1.7 Quarterly Reporting to RBI

NUCFDC is required to submit a quarterly statement to the Department of Regulation, RBI (Central Office), within 15 days from the close of each quarter, detailing:

• The amount of equity raised
• The number and category of subscribers
• The subscription amounts

2. Regulatory Significance

This direction provides NUCFDC with operational flexibility in raising capital from co-operative sector institutions, while ensuring robust regulatory oversight, restricted investor participation, and transparency through reporting obligations.

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