DIPP permits 100 percent FDI into ARDs through automatic route

Q.  DIPP has permitted how much FDI through to asset reconstruction companies through the automatic route?
- Published on 10 May 16

a. 100%
b. 95%
c. 75%
d. 65%

ANSWER: 100%
 
The Department of Industrial Policy & Promotion (DIPP) under Union Ministry of Commerce & Industry permitted 100% foreign direct investment (FDI) into asset reconstruction companies (ARCs) through automatic route.
  • Person resident outside India can invest in the capital of ARCs registered with Reserve bank of India, up to 100 per cent on the automatic route. Earlier, it was 49 per cent through automatic route and beyond 49 percent through government route.
  • It stated that total share holding of an individual foreign institutional investor (FII)/foreign portfolio investment (FPI) shall be below 10 per cent of the total paid-up capital.
  • FIIs/ FPIs may be allowed up to 100 per cent of each tranche in security receipts (SRs) issued by ARCs which are subjected to RBI guidelines.

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