The Reserve Bank of India has amended its Core Investment Companies Directions, 2025 to clarify how Owned Fund must be computed for core investment companies. The revised definition, effective immediately, includes paid up equity capital, compulsorily convertible preference shares, free reserves including quarterly profits, the balance in the share premium account, and capital reserves arising from sale proceeds of assets, while excluding revaluation reserves and deducting accumulated losses, the book value of intangible assets, and deferred revenue expenditure. Quarterly profits can be included only if the financial statements are subject to a quarterly limited review or audit by statutory auditors. The eligible amount must be reduced by average dividend paid over the last three financial years using the specified formula EPt = NPt - 0.25 × D × t, where t runs from 1 to 4, and losses in the current year must be fully deducted from Owned Fund. The amendment also states that CICs do not need to deduct a right of use asset created under Ind AS 116 Leases from Owned Fund where the leased underlying asset is a tangible asset.
Reserve Bank of India 2026-03-10
Reserve Bank of India clarifies core investment companies owned fund calculation including quarterly profits and leased tangible asset treatment
The Reserve Bank of India revised its Core Investment Companies Directions, 2025, clarifying the computation of Owned Fund. The updated definition includes paid-up equity capital, compulsorily convertible preference shares, and free reserves, excluding revaluation reserves and deducting accumulated losses and intangible assets. Quarterly profits are included only if audited, with specific deductions for dividends and current year losses.