The Reserve Bank of India (RBI) on Tuesday said that foreign institutional investors (FIIs) can now invest up to limit of 23% in commodity exchanges without seeking prior approval from the government.
However, prior approval of the Foreign Investment Promotion Board (FIPB) would be required only for FDI component and Government approval would not be required for investment by registered FIIs in commodity exchanges, RBI said in the notification.
As per rules, India allows FII investment in commodity exchanges, with a composite ceiling of 49% with FDI limit of 26% and FII limit of 23% under Portfolio Investment Scheme (PIS).
Under the existing policy, ‘leasing and finance’ is one of the 18 NBFC activities wherein FDI up to 100% is permitted under automatic route, subject to minimum capitalisation norms.
RBI said that now foreign direct investment is permitted only in 'financial leases' (financial leasing activity) and not in 'operating leases' (operating leasing activity).