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April 2008

Press Note No. 1 (2008), dated 12-3-2008. — Guidelines for Foreign Investment in Credit Information Companies.

By Pinky Shah, Sonalee Godbole, Gaurang Gandhi
Chartered Accountants
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Part C : RBI/FEMA

Given below are the highlights of 6 Press Notes issued by the
Ministry of Commerce & Industry.

 

16 Press Note No. 1 (2008), dated 12-3-2008.
— Guidelines for Foreign Investment in Credit Information Companies.

The guidelines for foreign investment in Credit Information
Companies (CIC) are :



1. Foreign investment in CIC is subject to the Credit
Information Companies (Regulation) Act, 2005.

2. Foreign investment i.e., Foreign Direct
Investment (FDI) and Portfolio Investment Scheme (PIS) is allowed up to 49%
after obtaining prior approval from Foreign Investment Promotion Board (FIPB)
and regulatory clearance from RBI.

3. Foreign Institutional Investors (FII) can invest up to
24% in CIC listed on Stock Exchanges, provided :



(a) No single FII can directly or indirectly hold more
than 10% of the equity.

(b) Any acquisition in excess of 1% will have to be
reported to RBI.

(c) FII cannot seek representation on the Board of
Directors based on their shareholding.

 




In Annex to Press Note No. 4 (2006), dated 10-2-2006 ‘Credit
Reference Agencies’ is deleted from list of NBFC activities.

 

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