JP Morgan seeks nod to undertake all NBFC activities directly

The company has asked for a conversion of non-repatriable investment made by RHL Thomas to a repatriable one.

These investments together with approximately $28.31 million invested by Jardine Fleming India Holdings till date, will aggregate $50 million — the minimum capitalisation required for 100 per cent foreign direct investment in NBFCs. The $50 million investment also includes an additional capital of around $15 million infused by JP Morgan India.

The government had initially allowed 100 per cent FDI in NBFCs where such NBFC had to act only as a holding company with a minimum capitalisation of $50 million and specific activities to be undertaken by downstream subsidiaries with minimum 25 per cent domestic equity. However, on review of the policy, it decided to allow holding companies with a minimum capital of $50 million to set up a 100 per cent downstream subsidiary to undertake specific NBFC activities.

The company was set up to undertake financial services including merchant banking, corporate finance, stock broking and asset management.

In April 2000, Chase Manhattan Corporation, agreed to buy British investment bank and fund manager, Robert Fleming Holdings for $7.7 billion. This was followed up by its merger with commercial and investment bank, JP Morgan & Co for about $34 billion in stock, in September the same year.

As a result, Jardine Fleming, a joint venture between Robert Fleming and the Jardine Matheson group in Asia came into the Chase Manhattan fold in India. Upon the merger between JP Morgan and Chase Manhattan Bank, there was a three-way integration between Jardine Fleming, Chase Manhattan and JP Morgan in India.