What is the RBI's stance on foreign investment in Indian NBFCs?

The RBI requires foreign investors to meet strict 'fit and proper' criteria for acquiring stakes in NBFCs and banks.

Has the RBI changed its regulatory approach for foreign investors?

No, the RBI's regulatory stance and due-diligence framework for foreign investors remain unchanged.

Why are foreign institutions showing renewed interest in India's financial sector?

Renewed interest reflects India's growing attractiveness as a financial market, offering long-term growth opportunities.

Home / Business and Economy / RBI: Foreign Investment in NBFCs Requires Strict 'Fit and Proper'

RBI: Foreign Investment in NBFCs Requires Strict 'Fit and Proper'

19 Dec

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Summary

RBI maintains strict 'fit and proper' assessments for foreign investors.
Regulatory stance on NBFCs and banks remains unchanged, says ex-RBI Deputy Governor.
Renewed foreign interest reflects India's market attractiveness, with safeguards paramount.

RBI: Foreign Investment in NBFCs Requires Strict 'Fit and Proper'

The Reserve Bank of India (RBI) continues to uphold its strict 'fit and proper' assessment criteria for foreign entities looking to acquire stakes in non-banking financial companies (NBFCs) and banks. R Gandhi, a former Deputy Governor of the RBI, clarified that recent foreign investment activity does not signify a relaxation of regulatory oversight.

Gandhi explained that while policy has always permitted foreign ownership under specific conditions, foreign institutions are now demonstrating greater seriousness by submitting concrete applications. The RBI's due-diligence process remains thorough, with no compromise on standards or checks for ownership proposals.