The Reserve Bank of India has permitted 100 per cent foreign direct investment in ‘Other Financial Services’ carried out by non-banking finance firms.
“Other Financial Services will include activities which are regulated by any financial sector regulator viz. RBI, Sebi, IRDA, Pension Fund Regulatory and Development Authority, National Housing Bank or any other financial sector regulator as may be notified by the government … in this regard,” it said.
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Such foreign investment would be subject to conditionalities, including minimum capitalisation norms, as specified by the concerned regulator or government agency, it said. The notification, however, did not specify the sectors which have been opened up for automatic route.
The present regulations on NBFCs stipulate that FDI would be allowed on automatic route for only 18 specified NBFC activities after fulfilling prescribed minimum capitalisation norms mentioned therein.