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Liberalization of Foreign Direct
Investment - Other Financial Services
Department of Industrial Policy &
Promotion in order to provide easy finance to the Indian Industries has
liberalized the Foreign Direct Investment ('FDI') limits in Non-Banking
Financial Company. Para 5.2.26 of the Consolidated FDI Policy has been
replaced with the following para subject to specified conditions in accounting outsourcing companies in India:
Before Circular:
Foreign investment in NBFC is allowed under the automatic route in only the
following activities:
i. Merchant
Banking
ii. Under
Writing
iii. Portfolio
Management Services
iv. Investment
Advisory Services
v. Financial
Consultancy
vi. Stock
Broking
vii. Asset
Management
viii. Venture
Capital
ix. Custodian
Services
x. Factoring
xi. Credit
Rating Agencies
xii. Leasing
& Finance
xiii. Housing
Finance
xiv. Forex
Broking
xv. Credit
Card Business
xvi. Money
Changing Business
xvii. Micro
Credit
xviii. Rural Credit
After Circular:
Other Financial Services: Financial Services activities regulated by
Financial Sector regulators viz. Reserve Bank of India, Securities and
Exchange Board of India, Insurance Regulatory and Development Authority
direct foreign investment in India, The Pension Fund Regulatory and
Development Authority, National Horticulture Board or any other financial
sector regulator as may be notified by Government of India subject to
certain conditions.
% of Equity / FDI Cap : 100%
Entry Route: Automatic
Further, minimum capitalization norms for Foreign Direct Investment in
Non-Banking Finance Companies have been done away with. Investment in
"Other Financial Services" activities shall be now subject to
conditionalities, including minimum capitalization norms, as specified by
the concerned Regulator or Government Agency.
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