INDIA: Increase to India foreign investment cap for investment in India credit information companies

Tuesday December 3 2013

The Reserve Bank of India has announced that the India foreign investment cap in credit information companies has been relaxed. Under previous rules, investments, directly or indirectly by any person, whether resident or otherwise, were limited to 10% of the equity capital of a Credit Information Company, with investments under FDI permitted up to 49% subject to conditions.

Under the new rules, a higher FDI limit shall apply to entities which have an established track record of running a Credit Information Bureau in a well regulated environment, as under:

(a) up to 49% if ownership of the investor company is not well diversified (i.e., one or more shareholders each hold more than 10% of voting rights in the company)

(b) up to 74% if ownership of investor company is well diversified, or if not well diversified, at least 50% of the directors of the investee CIC in India are Indian nationals/ Non-Resident Indians/ Persons of Indian Origin subject to the condition that one third of the directors are Indian nationals resident in India.

Click on the above link for the RBI notification on the India foreign investment cap increase.