Cabinet nod for changes to FDI regulations in NBFCs [Economy]
- The Cabinet approved a proposal to amend rules for foreign investment in non- banking finance companies (NBFCs).
- The amendment in the existing Foreign Exchange Management regulations on non- banking finance companies (NBFCs) will enable inflow of foreign investment in ‘other financial services’ on automatic route provided such services are regulated by any financial sector regulators (RBI, SEBI, PFRDA etc.)/government agencies.
- Foreign investment in ‘other financial services’ that are not regulated by any regulators or by a government agency can be made via the approval route, according to the statement.
- Minimum capitalisation norms as mandated under FDI policy have been eliminated as most regulators have already fixed minimum capitalisation norms.
- The present regulations on NBFCs stipulates that FDI would be allowed on automatic route for only 18 specified NBFC activities after fulfilling prescribed minimum capitalisation norms mentioned therein.
- The Cabinet gave its ex-post facto approval for the amendment of Section 64 and section 65 and the consequential amendment in Section 115 of Factories Act, 1948 by the introduction of the Factories (Amendment) Bill, 2016 in Parliament.
- These amendments relate to increase in overtime hours from the existing 50 hours per quarter to 100 hours (Section 64) and existing 75 hours per quarter to 125 hours (Section 65).
- The Cabinet also approved the introduction of pension and post-retirement medical services benefit to the employees of the Food Corporation of India.