RBI to allow more FDI into CICs
The Dollar Business Bureau
With plans to attract more foreign investment, the Reserve Bank of India has laid down rules allowing up to 100% Foreign Direct Investment in Credit Information Companies (CICs).
This is allowed only if the ownership of the company is very well diversified. If the ownership is not well-diversified, then there is a FDI cap of 49 percent.
A diversified company is where one or more shareholders own more than 10 percent of the voting rights.
RBI earlier has said that it may consider allowing foreign investments in the companies that have established a track record of running a Credit Information Bureau in a well-regulated environment. Talking about the investments by Foreign Institutional Investor (FII) and Foreign Portfolio Investment (FPI), RBI said that a single entity should directly or indirectly hold equity below 10 percent.
The premier regulating authority further said that any acquisition, which is in excess of 1 percent should be mandatorily informed to the RBI.
It also added that the FIIs and FPIs investing in the credit information companies cannot seek representation from the board of directors on the basis of their shareholdings.