The Reserve Bank of India (RBI) has given the go-ahead to 100% foreign direct investment (FDI) under the automatic route in 'other financial services'.
Other Financial Services will include activities that are regulated by a financial sector regulator such as the RBI, Securities and Exchange Board of India, Insurance Regulatory and Development Authority, Pension Fund Regulatory and Development Authority, National Housing Bank.
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“Such foreign investment shall be subject to conditionalities, including minimum capitalisation norms, as specified by the concerned Regulator/ Government Agency,” RBI said.
In case of financial services activities not regulated or partially regulated by a financial sector regulator or where there is lack of clarity regarding regulatory oversight, up to 100% foreign investment will be allowed under the government approval route.
The central bank has however, clarified that foreign investment in an activity specifically regulated by an Act will be restricted to foreign investment levels/limits.
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