Reserve Bank Of India
A. P. (DIR Series) Circular No. 41
October 10, 2012
To
All Category-I Authorised Dealer Banks
Madam / Sir,
Foreign investment in NBFC Sector -
Amendment to the Foreign Direct Investment (FDI) Scheme
Attention of Authorised Dealer Category – I (AD Category-I) banks is invited to
Schedule 1 to Foreign Exchange Management (Transfer or Issue of Security by a
Person Resident outside India) Regulations, 2000 notified by the Reserve Bank
vide
Notification No. FEMA 20/2000-RB dated 3rd May 2000, as amended from time
to time, read with Sr.No.24.2 of Annex B to
A.P. (DIR Series) Circular No. 137
dated June 28, 2012 pertaining to sector specific conditions for FDI in NBFCs .
- It has now been decided in consultation with the Government to amend certain
conditions in the aforesaid circular. The amended conditions are given in the
Annex.
- All other conditions contained in Sr. No. 24.2 in the A.P. (DIR Series)
Circular No. 137 dated June 28, 2012 shall remain unchanged.
- A copy of Press Note No.9 (2012 Series) dated October 3, 2012 issued in this
regard by Department of Industrial Policy and Promotion (DIPP), Ministry of
Commerce and Industry, Government of India is enclosed.
- 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/2012-13/241
Annex
[A. P. (DIR Series) Circular No.
dated October , 2012]
| c.f. A.P.(DIR Series) Circular No. 137 dated June 28, 2012
|
Earlier Condition |
Revised condition |
| Sr.No.24.2 (1) (iv)
|
10 100% foreign owned NBFCs with a minimum capitalisation of US$ 50 million can
set up step down subsidiaries for specific NBFC activities, without any
restriction on the number of operating subsidiaries and without bringing in
additional capital. The minimum capitalization condition as mandated by para
3.10.4.1, therefore, shall not apply to downstream subsidiaries.
|
NBFCs (i) having foreign investment more than 75% and up to 100%, and (ii) with
a minimum capitalisation of US$ 50 million, can set up step down subsidiaries
for specific NBFC activities, without any restriction on the number of operating
subsidiaries and without bringing in additional capital. The minimum
capitalization condition as mandated by para 3.10.4.1 of DIPP Circular 1of 2012
dated April 10, 2012 on Consolidated FDI Policy, therefore, shall not apply to
downstream subsidiaries. |