RBI Aligns Rules For FDI In CICs

Mumbai: Seeking to attract more foreign investment, the Reserve Bank of India (RBI) on Thursday laid down rules allowing FDI up to 100 per cent in credit information companies (CICs) if ownership of the investor company is well diversified.

However, the FDI cap will be 49 per cent if the ownership is not well diversified.

A diversified company is one in which where one or more shareholder each holds more than 10 per cent of voting rights.

In supersession of its earlier directions, RBI said it "may consider allowing higher foreign direct investment limits to entities which have an established track record of running a CIC in a well-regulated environment".

On investment by FIIs and FPIs, RBI said a single entity should, directly or indirectly, hold below 10 per cent equity.

"Any acquisition in excess of 1 per cent will have to be reported to RBI as a mandatory requirement. FIIs/FPIs investing in CICs shall not seek a representation on the board of directors based on their shareholding," RBI added.

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