Business Standard

RBI bars NBFCs from opening branches abroad

Related News

Non-bank financial companies (NBFCs) will not be permitted to open branches abroad, the said today. However, which already have branches abroad, will be allowed to continue those operations, subject to their compliance with the revised guidelines.

The regulator has allowed NBFCs to set up representative offices and subsidiaries abroad. It said subsidiaries established abroad by an NBFC should not be used as vehicles to raise resources Indian operations.

NBFCs would also be barred from investing in non-financial activities and their total investment should not exceed 100 per cent of the net-owned funds. “The overseas investment in a single entity, including its step-down subsidiaries, by way of equity or fund-based commitment, shall not be more than 15 per cent of the funds owned by NBFCs,” RBI said.

Direct investment in activities prohibited under the or in sectoral funds will not be allowed and the level and an NBFC's net non-performing assets should not be more than five per cent of its net advances, for NBFC’s planning to set up offices abroad.

While deposit-taking NBFCs would have to maintain a capital adequacy ratio of 15 per cent after investing in a subsidiary, non-deposit taking NBFCs would have to maintain a 10 per cent capital adequacy ratio.

Read more on:   
|
|

Read More

Blackstone bets on low-risk realty assets

For its investments in the Indian real estate, Blackstone seems to follow adage “slow and steady wins the race” quite ardently.Till 2011, the real ...

Quick Links

More news from Finance Rss icon

Bond yields could drop to 8% in 6 months

Government bond yields are seen falling on expectations of a rate cut this financial year, due to a fall in retail inflation. Experts say the ...

SBI MF launches inflation-indexed bond

SBI Mutual Fund on Thursday said it had launched an inflation-indexed bond fund (IIBF) offering, which is aimed at investors with a low to ...

Long term motor policies for commercial vehicles is sometime away

It is estimated that the combined ratio for motor insurance might touch 200% by the end of March 31, 2015

Back to Top