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Jio Financial Services gets green light from RBI to become an Essential Investment Company
Jio Financial Services received approval from the Reserve Bank of India (RBI) on Thursday to become a Core Investment Company (CIC) from a Non-Banking Financial Company (NBFC), the company said in a stock exchange filing.
Reliance Industries Ltd, a conglomerate focused on energy and telecommunications, has split to form Jio Financial Services.
In November last year, Jio Financial Services had submitted an application to the RBI to convert an NBFC into a CIC.
To incorporate the company, Jio Financial Services has applied to the RBI following the demerger of Reliance Industries’ financial services division.
A CIC is a specialised NBFC with assets greater than ₹100 crore, according to media reports. The primary responsibility of a CIC, as per the RBI circular dated December 20, 2016, is to purchase shares and bonds subject to specific restrictions. At least 90% of the CIC’s net assets must be invested in bonds, debentures, equity shares, preference shares, debt or loans made to group companies.
All CICs with assets exceeding ₹100 crore are subject to the regulations of the Reserve Bank of India.
Jio Financial officially debuted on the stock exchanges on 21 August 2023. In the Thursday session, the share price of Jio Financial Services closed flat at ₹348.05 apiece on the BSE.
Reliance Industries, the parent company of Jio Financial Services, will release its June quarter financial results on Friday, July 19.
On the back of improved revenue, Jio Financial Services reported a 6% rise in consolidated net profit for the fourth quarter ended March 2024 to ₹311 crore. The financial services firm had declared a profit for the quarter ended December of ₹294 crore.
Jio Financial Services said in a regulatory filing that the company’s consolidated net profit has increased multi-fold from ₹31 crore in the previous fiscal to ₹1,605 crore in FY2024.
From ₹414 crore in the December quarter to ₹418 crore, its revenue increased marginally.
In addition to investments and lending, Jio Financial Services also offers payment gateway, banking and payment aggregator services.
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