100% Foreign Direct Investment / NRI investments are allowed in the following 19 NBFC activities, shall be as per the levels indicated below :
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 Reference Agencies
12. Credit Rating Agencies
13. Leasing & Finance
14. Housing Finance
15. Forex-broking
16. Credit Card Business
17. Money-changing Business
18. Micro-credit
19. 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
c) Minimum Capitalisation norms for non-fund based activities.
Minimum Capitalisation norm of US$0.5 million is applicable in respect of non-fund based NBFCs with foreign investment.
d) Foreign investors can set up 100% operating subsidiaries without the condition to disinvest a minimum of 25% of its equity to Indian entities, subject to bringing in US $ 50 million as at b) (iii) above ( without any restriction on number of operating subsidiaries without bringing in additional capital)
e) 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.
f) FDI in the NBFC sector is put on automatic route subject to compliance with guidelines of the Reserve Bank of India. RBI would issue appropriate guidelines in this regard