Cabinet Liberalises Foreign Investment Norms For NBFC Sector – Feedback

Expanding the list of non-banking financial companies which can attract foreign direct investment, the Cabinet on Wednesday permitted foreign investment through the automatic route in “other financial services”, if they are under regulators like the Reserve Bank of India and market regulator Securities and Exchange Board of India.

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. The Cabinet chaired by Prime Minister Narendra Modi has given approval to amend regulation for foreign investment in NBFCs, an official release said. This is the third major relaxation in FDI norms since November 2015. In June this year, the government had announced liberalisation in eight sectors, including defense and civil aviation sectors.

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