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Credit information bureaus trip on new FDI norms
The new Foreign Direct Investment (FDI) norms, which stipulate changes in the way foreign investment in a domestic company is calculated, have put a roadblock in the path of credit information bureaus, which are eager to rope in private sector banks as investors. - FIPB to consider Jet"s foreign fund raising plans - Comexes given 6 more months for divesting foreign equity - FinMin not opposing new FDI norms - FII inflows to cross $10 bn-mark this month: Analysts - UAE may allow 100% ownership of businesses - FDI up 56% as India beats recession blues According to the head of a credit information bureau which is yet to begin operations, a number of private sector lenders such as ICICI Bank and HDFC wanted to pick up stakes in credit bureaus but could not do so for fear of breaching the 49 per cent sectoral cap on FDI in credit companies. According to the second press note issued by the commerce ministry in February, 2009, a company will be deemed Indian-owned only if Indians own more than half of its equity capital and control its management. Under these guidelines, seven private sector banks — ICICI Bank, HDFC Bank, YES Bank, IndusInd Bank, Federal Bank, ING Vysya Bank and Development Credit Bank — could be categorized as foreign-owned because foreign investment in such institutions exceeds 50 per cent. In addition, any onward investment by such companies would be deemed as foreign investment. A senior executive of another credit bureau admitted that FDI norms were a hurdle. He, however, refused to elaborate on his company’s plans to tackle the issue. In April this year, the Reserve Bank of India (RBI) gave ‘in-principal approval to four credit bureaus including Credit Information Bureau (India) Ltd (CIBIL), Equifax Credit Information Services, Experian Credit Information Company of India and Highmark Credit Information Services. Of these, CIBIL is the only functional credit bureau, in which the foreign holding also exceeds 49 per cent according to new FDI rules, thus breaching the sectoral cap. CIBIL declined to comment on it plans to tackle the issue. The credit bureaus had until July 15 to furnish proof of authorised and paid-up capital, approval from the Foreign Investment Promotion Board for the foreign partner and other such relevant documents to RBI. However, due to lack of clarity on FDI norms, none of the three companies were able to keep to the July 15 deadline and sought an extension from RBI. RBI extended the deadline by three months to October 15, 2009. Sources said the credit bureaus are likely to seek a further extension from RBI.PaydayBank commented:
However, a foreign technology partner can be included as a collaborator to benefits from the expertise available with the multinational bureaus.
24.11.2011
payday loan commented:
These new FDI norms are really very strict for people, which stipulate changes in the way foreign investment in a domestic company is calculated
25.11.2011
how to trade currency commented:
IO also heard that according to the second press note issued by the commerce ministry in February, 2009.
02.12.2011