RESERVE BANK OF INDIA
Foreign Exchange Department
Central Office
Mumbai - 400 001
A.P. (DIR Series) Circular No. 127 May 15, 2012
To
All Category - I Authorised Dealer Banks
Madam / Sir,
Foreign investment in NBFC Sector under the Foreign Direct
Investment (FDI) Scheme - Clarification
Attention of Authorised Dealers Category – I (AD Category - I) banks is invited
to
A.P. (Dir Series) Circular No.121 dated May 8, 2012.
- The Reserve Bank of India has been receiving requests for clarifications as
to whether ‘operating leases’ would not be permissible in terms of para 3 of the
circular ibid.
- It is clarified that the activity ‘leasing and finance’, which is one among
the eighteen NBFC activities wherein FDI up to 100 per cent is permitted under
the automatic route, subject to minimum capitalisation norms, covers only
‘financial leases’ and not ‘operating leases’, in so far as the NBFC sector is
concerned.
- AD Category - I banks may bring the contents of the circular to the notice of
their customers/constituents concerned.
- Necessary amendments to Foreign Exchange Management (Transfer or Issue of
Security by a Person Resident Outside India) Regulations, 2000 (Notification No.
FEMA 20/2000-RB dated May 3, 2000) are being notified separately.
- The directions contained in this circular have been issued under sections
10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and
are without prejudice to permissions / approvals, if any, required under any
other law.
Yours faithfully,
(Rudra Narayan Kar)
Chief General Manager
RBI/2011-12/562