Government issues minimum FDI capital requirement for unregistered financial services entities

Minimum Capital Requirements for ‘Other Financial Services’ activities which are unregulated by any Financial Sector Regulator and Foreign Direct Investment (FDI) is allowed under Government Route. It is clarified that fund and non-fund based activities shall include, but not limited to, the following activities to the extent that they are-

(i)not regulated by any financial sector regulator – this shall include scenarios where the entity is not registered with the concerned sector regulator and/or the entity/activity is exempted under the concerned sector regulations; or

(ii)where only part of the financial services activity is regulated; or

(iii) where there is a doubt regarding the regulatory oversight

Fund based activities: Merchant Banking, Under Writing, Portfolio Management Services, Stock Broking, Asset Management, Venture Capital, Custodian Services, Factoring, Leasing & Finance, Housing Finance, Credit Card Business, Micro Credit, Rural Credit.

Non-fund based activities: Investment advisory services, Financial Consultancy, Forex Broking, Money Changing Business, Credit Rating Agencies’.

Fund and Non-Fund based activities


 Minimum FDI capital




Fund based activities


Unregistered / Exempted


US$ 20 mn

Non-fund based

Unregistered / Exempted


US$ 2mn

                                           Source: Ministry of Finance, Government of India

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