Bank of America has approached the Foreign Investment Promotion Board (FIPB) with a fresh proposal to set up a subsidiary NBFC (non-banking finance company) with a majority equity holding of 75 per cent.
Some time back, the government had rejected its earlier application to set up a 100 per cent subsidiary NBFC.
BankAm is yet to decide on the Indian partner who will hold the balance 25 per cent. However, it proposes to finalise the partner within a specified time period.
In its recent application to the Foreign Investment Promotion Board, the foreign direct investment proposed by BankAm was $5 million. However, the Foreign Investment Promotion Board in its meeting last Saturday, decided to defer the proposal after the department of economic affairs sought clarifications from the company.
BankAms amended proposal to seek approval for a 75 per cent subsidiary instead of a wholly owned company is in line with the finance ministrys decision earlier in the year to reject the application moved by US-based GE Capital which had sought approval for a 100 per cent buyout of SRF Finance.
The ministry had then decided to allow GE Caps to go ahead with its negotiated buy out of Arun Bharat Ram-promoted SRF Ltds stake of 55.5 per cent in the Indian company, only after it made an open offer to mop up another 20 per cent from the public at a price of Rs 53.50 per share.
GE Caps was reported to have already obtained the approval of the Securities and Exchange Board of India for a total buy-out of SRF Finance under the new take-over code before applying for FIPB clearance, which subsequently rejected the proposal.
