ANNOUNCEMENT 06 May 2016

Foreign investments in Asset Reconstruction Companies allowed without requiring prior government approval.

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 0 neutral
  • 1 liberalising
Inception date: 06 May 2016 | Removal date: open ended

FDI: Entry and ownership rule

On 6 May 2016, the Indian Ministry of Commerce and Industry through Press Note 4 (2016) amended the FDI policy to allow investments by FDIs and FIIs in Asset Reconstruction Companies (ARCs) up to 100% through the automatic route i.e. no prior approval required from the Government. Earlier, FDI investments above 49% in an ARC required prior approval of the government.

All other conditions regarding foreign investments in ARCs remain unchanged.

An Asset Reconstruction Company is involved in taking over Non-Performing Assets/distressed assets of banks and financial institutions and later sell repackaged assets.

AFFECTED SECTORS

 
N/A

AFFECTED PRODUCTS

 
N/A