Govt relaxes rules for setting up arms for foreign owned NBFC

The government today relaxed norms for the setting up of subsidiaries by foreign owned Non-banking financial companies (NBFCs).

NBFCs with foreign holding of more than 75 percent and up to 100 percent, with the minimum paid-up capital of $ 50 million, are now allowed to open any number of subsidiaries, an official release said.

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As per the existing norms, only 100 percent foreign-owned NBFCs, with a minimum capitalisation of $50 million are allowed to establish any number of step down subsidiaries for specific NBFC activities.

“With a minimum capitalisation of $50 million, (foreign owned NBFCs) 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,” said a notification of the Department of Industrial Policy & Promotion.

PTI