ANNOUNCEMENT 21 Dec 2012

In December 2012, the government of India announced changed rules for foreign investors.

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 0 neutral
  • 1 liberalising
Inception date: 21 Dec 2012 | Removal date: open ended
Still in force

FDI: Entry and ownership rule

 On 21 December 2012, the Ministry of Finance amended the regulations for foreign investments in Asset Reconstruction Companies (ARCs) as follows:

  • The ceiling for FDI in ARCs has been increased from 49% to 74% with the condition that any such sponsor will hold no more than 50% of the shareholding in an ARC.
  • Foreign Institutional Investors (FIIs), who were earlier disallowed to invest in ARCs, have now been permitted subject to the condition that the shareholding by an individual FII will not exceed 10% of the total paid-up capital.
  • The ceiling for investments by FIIs in each tranche of scheme of Security Recepits issued by ARCs has been increased from 49% to 74%. Also, the limit of 10% for each individual FII in each tranche has been removed.

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

The FDI limit was increased to 100% on 16 July 2013 (see related State Act).

AFFECTED SECTORS

 
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AFFECTED PRODUCTS

 
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