Govt issues minimum FDI requirement for unregistered financial services entities

The minimum FDI capital is $20 million for unregistered/exempted entities engaged in 'fund based activities'.

PTI April 17, 2018 12:07:14 IST
Govt issues minimum FDI requirement for unregistered financial services entities

New Delhi: The government on Monday fixed minimum overseas capital requirement for certain class of unregistered and unregulated entities offering financial services under the foreign direct investment regime.

The finance ministry came out with 'minimum capital requirements for other financial services activities which are unregulated by any financial sector regulator and FDI is allowed under government route'.

Govt issues minimum FDI requirement for unregistered financial services entities

Representational image. Reuters

The minimum FDI capital is $20 million for unregistered/exempted entities engaged in 'fund based activities'. In the case of unregistered entities engaged in 'non-fund based' activities the threshold is $2 million, an official release said.

For the minimum capital requirement, fund-based activities include merchant banking, stock broking, asset management, venture capital, housing finance, credit card business, micro credit, and rural credit.

Non-fund based activities include investment advisory services, financial consultancy, forex broking, money changing business, and credit rating agencies, it said.

According to the release, the requirements would be applicable for fund and non-fund based activities including those not regulated by any financial sector regulator as well as cases "where there is a doubt regarding the regulatory oversight".

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