NEW DELHI, May 1: In a major move to streamline foreign direct investment proposals of non-banking financial services sector, the government today amended the guidelines for consideration of such proposals, cleared by the Foreign Investment Promotion Board (FIPB).

The new guidelines, which are more elaborate and transparent, have been designed in consultation with the Reserve Bank of India and Securities and Exchange Board of India (SEBI) keeping in view the recent amendments in the RBI act.

The guidelines provide opening up of only 14 sub-sectors of financial sector including housing finance and leasing and finance, for the majority holding foreign non-banking financial companies.

The government has made clearance from FIPB mandatory for all foreign equity investments in the non-banking services sector.

Under the amended FIPB guidelines for foreign equity participation in Non-Banking Financial Companies (NBFCs), the government has permitted investment in areas including merchant and portfolio management services apart from fixing capitalisation norms.

The guideline has stipulated that a minimum market capitalisation of 0.5 million dollar foreign equity is less than or equal to 51 per cent and 5 million dollars if foreign equity is more than 51 per cent but less than or equal to 75 per cent, an official release said here today.

Where foreign investment is more than 75 per cent, the market capitalisation requirement has been fixed at 50 million dollars.

Underwriting, investment advisory services, financial consultancy, stock exchange and asset management are other areas where foreign investment are allowed.

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