FDI thresh­old set at $20 mn for mer­chant bank­ing

Business Standard - - ECONOMY & FINANCE - BS RE­PORTER<

For­eign di­rect in­vestors, keen on pump­ing money in mer­chant bank­ing or as­set man­age­ment, have to bring in a min­i­mum of $20 mil­lion. The Cen­tre has fixed a thresh­old of $20 mil­lion for for­eign di­rect in­vest­ments (FDIs) in un­reg­is­tered fund-based ac­tiv­i­ties such as mer­chant bank­ing, un­der­writ­ing, port­fo­lio man­age­ment ser­vices, stock­broking, and as­set man­age­ment. The fund-based ac­tiv­i­ties also in­clude ven­ture cap­i­tal, cus­to­dian ser­vices, fac­tor­ing, leas­ing and fi­nance, hous­ing fi­nance, credit card busi­ness, mi­cro credit, and ru­ral credit. On the other hand, thresh­old for non-fund ac­tiv­i­ties, such as in­vest­ment ad­vi­sory ser­vices, fi­nan­cial con­sul­tancy, forex broking, has been set at $2 mil­lion. These ac­tiv­i­ties also in­clude money chang­ing busi­ness and credit rat­ing agen­cies. All these ac­tiv­i­ties are un­reg­u­lated by any fi­nan­cial sec­tor reg­u­la­tor and FDI is al­lowed under the gov­ern­ment route.

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