Foreign Investment

Proposals

* Foreign Institutional Investors (FIIs) can increase investment in a company up to 40% of the paid up capital with the prior approval of shareholders through a special resolution. This limit has now been increased to 49%

* Earlier on, Foreign Direct Investment (FDI) in Non-Banking Financial Companies (NBFCs) was permitted on a case to case basis up to 100% but with a condition that a minimum of 25% of their holding is divested in the domestic market. This condition has been removed provided the foreign investors bring in a minimum of US $50 million

*FDI in NBFCs will now be put on the automatic route subject to RBI guidelines