DIPP notifies 100 pct FDI in more financial services

The Commerce and Industry Ministry has in a press note said that the government has liberalized its FDI policy in other financial services and non-banking finance companies (NBFCs).

The Department of Industrial Policy and Promotion (DIPP) said, "We have notified 100 percent foreign direct investment in 'other financial services' carried out by NBFCs. The move will help attract foreign capital into the country."

Other financial services will include activities which are regulated by any financial sector regulator - 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.

The press note further adds it does not specify 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 capitalization norms mentioned therein.

Currently, 100 percent FDI through automatic route is permitted in 18 NBFC activities including merchant banking, under writing, portfolio management services, financial consultancy and stock broking.