RBI decides to allow FDI up to 100% in other financial services
The Reserve Bank of India (RBI) on Thursday decided to allow foreign investment up to 100 per cent under the automatic route in ‘other financial services’.
RBI, however, said foreign investment in an activity that is regulated by an Act will be restricted to foreign direct investment (FDI) limits. Hence, sectors such as insurance, which already have pre-defined FDI limit (49 per cent in insurance) will continue to follow that.
RBI said such FDI shall be subject to conditionalities, including minimum capitalisation norms as specified by the concerned regulator or government agency. In the financial services activities that are not regulated or are partly regulated by any financial sector regulator or where there is a lack of clarity regarding regulatory oversight, FDI will be allowed up to 100 per cent under the government approval route.
‘Other financial services’ will include activities which are regulated by any financial sector regulator, including the Reserve Bank of India, the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority of India, Pension Fund Regulatory and Development Authority, National Housing