RBI permits 100 percent FDI in financial services
Q. RBI has permitted 100% FDI in which services under the automatic route?- Published on 21 Oct 16a. Personal Financial Services
b. Other Financial Services
c. Key Financial Services
d. None of the above
ANSWER: Other Financial Services
In a move to attract foreign capital in the country, RBI has permitted 100 percent FDI in other financial services carried out by NBFCs.
- In consultation with the government of India, it has been decided to permit foreign investment up to 100 percent under the automatic routes in Other Financial Services
- These financial services include activities regulated by any financial sector regulator namely RBI, SEBI, IRDA, PFRDA, NHB or any financial sector regulatory body
- Such foreign investment would be subject to conditionality including minimum capitalisation norms
- Other salient features of the revised regulatory framework include downstream investment by any entity engaged in Other Financial Services and will be subject to extant sectoral regulations
- In the Budget 2016-2017 Speech, FM Arun Jaitley had announced about this liberation.
- Currently 100 percent FDI is allowed in 18 NBFC activities such as merchant banking, underwriting, portfolio management services, stock broking and financial consultancy
- In 2015-2016, FDI in India grew by 29 percent Y-O-Y to USD 40 billion.
