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100% Foreign Direct Investment  / NRI investments are allowed through automatic rout in the following 18 NBFC activities, shall be as per the levels indicated below :

 

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(a) Activities covered :

1. Merchant Banking

2. Under writing

3. Portfolio Management Services

4. Investment Advisory Services

5. Financial Consultancy

6. Stock-broking

7. Asset Management

8. Venture Capital

9. Custodial Services

10. Factoring

11. Credit Rating Agencies

12. Leasing & Finance

13. Housing Finance

14. Forex-broking

15. Credit Card Business

16. Money-changing Business

17. Micro-credit

18. Rural credit

(b) Minimum Capitalisation norms for fund based NBFCs

(I) for FDI upto 51%, US $ 0.5 million to be brought in upfront

(II) If the FDI is above 51 % and upto 75 %, US $ 5 million to be brought upfront

(III) If the FDI is above75 % and upto 100 %, US $ 50 million out of which $ 7.5 million to be brought in upfront and the balance in 24 months

(IV)100% foreign owned NBFCs with a minimum capitalization of US $ 50 million can be set up step down subsidiaries for specific NBFC activities and without bringing in additional capital.

(V) Joint Venture operating NBFCs that have 75% or less than 75% foreign investment will also be allowed to set up subsidiaries for undertaking other NBFC activities , subject to the subsidiaries also complying with the applicable minimum capital inflow i.e, (b)(i) and (b)(ii) above.

(VI) Non-fund based activities

US $ 0.5 million to brought upfront for all permitted non-fund based NBFCs irrespective of the level of foreign investment subject to the following conditions:

It would not be permissible for such a company to set up any subsidiary for any other activity, not it an participate in any equity of an NBFC holding /operagting company.

Note: The following actives would be classified as Non-fun Based activities:

(a) Investment Advisory Services

(b) Financial Consultancy Forex Broking

(c) Money Changing Business

(d) Credit Rating Agencies

(VII) This will subject to compliance with guidelines of RBI.

Note: Credit Card business includes issuance, sales, marketing & design of various payment products suchas credit cards, charge cards, debit cards, stored value cards, smar card, value added cards etc.

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