Section 8 of The Credit Information Companies (Regulation) Act, 2005.
- (1)The authorised capital of every credit information company shall be a minimum of thirty crores: Provided that the Reserve Bank may, by notification, increase the minimum amount of authorised capital to any amount not exceeding fifty crores.
- (2)The issued capital of every credit information company shall not be less than twenty crores: Provided that the Reserve Bank may, by notification, increase the issued capital to any amount not exceeding the minimum amount of authorised capital as referred to in sub-section (1).
- (3)The minimum paid up capital of every credit information company at any time shall not be less than seventy-five per cent. of the issued capital.
Summary
- The authorised capital (the maximum amount of share capital a company is allowed to issue) of every credit information company must be at least thirty crore rupees.
- The Reserve Bank has the power to increase this minimum authorised capital requirement up to fifty crore rupees.
- The issued capital (the actual value of shares offered to shareholders) must be at least twenty crore rupees.
- The minimum paid up capital (the amount of money shareholders have actually paid for their shares) must always be at least seventy-five percent of the issued capital.
Practical examples
FAQ
1. What is the absolute minimum authorised capital needed to start a credit information company?
The authorised capital must be a minimum of thirty crore rupees.
2. Can the Reserve Bank increase the required authorised capital?
Yes, the Reserve Bank can increase the minimum authorised capital up to fifty crore rupees by issuing a notification.
3. What is the rule for issued capital?
The issued capital of every credit information company shall not be less than twenty crore rupees.
4. How much of the issued capital must actually be paid up by the shareholders?
The minimum paid up capital at any time must not be less than seventy-five percent of the issued capital.
Test yourself
Q1.Under Section 8 of The Credit Information Companies (Regulation) Act, 2005., what is the minimum limit set for the authorised capital of a credit information company before any Reserve Bank increases?
Q2.Under Section 8 of The Credit Information Companies (Regulation) Act, 2005., what is the highest amount the Reserve Bank can set as the minimum authorised capital?
Q3.Under Section 8 of The Credit Information Companies (Regulation) Act, 2005., what is the legal requirement for a credit information company's paid up capital?
Q4.Under Section 8 of The Credit Information Companies (Regulation) Act, 2005., what is the minimum required amount for a credit information company's issued capital?