Norms for Setting up Arms of Foreign NBFCs Relaxed

The department of industrial policy and promotion (DIPP) on Thursday relaxed norms for setting up of subsidiaries by foreign-owned non banking financial companies. NBFCs with a foreign holding of more than 75% and up to 100%, with the minimum paid-up capital of $50 million, are now allowed to open any number of subsidiaries.

“With a minimum capitalisation of $50 million, foreign owned NBFC) 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 the DIPP notification.

As per the existing norms, only 100% foreign-owned NBFCs with a minimum capitalisation of $50 million are allowed to establish any number of step down subsidiaries for specific NBFC activities without any restriction on the number of operating subsidiaries and without bringing in additional capital.

This meant that such an NBFC would need to bring another $50 million. 

Financial Express, New Delhi, 05-10-2012