Financial Daily from THE HINDU group of publications
Friday, Jun 07, 2002
Financial Daily from THE HINDU group of publications Friday, Jun 07, 2002 |
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Money & Banking
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NBFCs FIPB eases norms for Rabo India's parent Ambarish Mukherjee
NEW DELHI, June 6 THE Foreign Investment Promotion Board has waived the condition of investing $31.5 million upfront it had imposed on the Netherlands-based parent company of Rabo India Finance Ltd (RIFL) for acquisition of the 25 per cent Indian shareholding in the company. The FIPB has reduced the amount the company has to bring in upfront from $31.5 million to $10 million and has granted the company a two-year period from the date of approval for pumping in the remaining $21.5 million into RIFL. However, the FIPB waiver is subject to the condition that the acquisition of the Indian equity will count towards minimum capitalisation norm only to the extent of the face value of the share acquired and that the minimum capital of $50 million would have to be met by way of equity capital and cannot be kept in debt/quasi-debt instrument. The FIPB has also put a bar on investment in all types of downstream subsidiary by RIFL before fulfilling the minimum capitalisation norm. The FIPB waiver follows recommendations from the Department of Economic Affairs (DEA) which had, in February this year, imposed the condition of bringing in the entire investment required to meet the minimum capitalisation norm of $50 million required for fund-based NBFC activities when RIFL's parent, namely, Cooperative Centrale Raiffeisen Boerenleebank B Boerenleebank, had applied for converting RIFL into a wholly-owned subsidiary. The board has also made it clear that the entire minimum capitalisation norm has to be met by way of inward remittance foreign exchange through normal banking channel. The company is currently in the process of converting itself into a bank from its present NBFC structure for which it has recently received the go-ahead from the Reserve Bank of India and will be known as Rabo Bank India.
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