The Indian cabinet has given the go-ahead to changes in rules for foreign investment in non-banking finance companies (NBFCs).

The changed rules allow foreign investment via automatic route in other financial services, provided they are under any of the regulators such as RBI, SEBI, PFRDA SEBI, or government agencies.

Currently, regulations for NBFCs allow foreign investment on automatic route for only 18 specified NBFC activities, namely merchant banking, under writing, portfolio management services, financial consultancy and stock broking.

Foreign investment can also come to financial services that are not regulated by any regulator or government agency, but only through approval route.

The government has also phased out minimum capitalisation norms as mandated under FDI policy, given that majority of the regulators already have fixed minimum capitalisation norms in place.

“This will induce FDI and spurt economic activities. It will cover whole India and is not limited to any State/Districts,” the government said.