Millennium Post

India’s watchdog bats for foreign interests

India’s watchdog bats for foreign interests
The final norms would be put in place after taking into account public comments on the proposal and amending existing regulations.

Releasing a concept paper, Sebi said the proposal is aimed at ‘removing any hindrance for investment in the infrastructure sector through the FVCI route and to boost the infrastructure sector in the country’.

According to the 12th Five Year Plan (2012-17), India requires Rs 65 lakh crore investment in infrastructure.

Sebi said the proposal is based on the fact that CICs are essentially holding companies and do not engage in financing activity similar to other NBFCs. Therefore, the proposal does not go against the intent of the FVCI Regulations of not allowing FVCI investment in non-banking financial services. ‘The proposal is expected to infuse funds into the infrastructure sector which is crucial for development of the country and has vast positive spillover effects over various other sectors and the entire economy.

‘This proposal to allow investment by FVCIs in CICs investing in infrastructure companies has also been endorsed by the government and Reserve Bank of India. The proposal is one of the recommendations of High Level Committee on Financing of Infrastructure,’ Sebi said. It is proposing that the negative list under the FVCI Regulations ‘is suitably modified to replace 'equipment leasing and hire purchase companies' with Asset Finance Companies and Infrastructure Finance Companies’, Sebi added. Public comments have been sought till 15 November.
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