Foreign investment ceiling in Asset Reconstruction Companies (ARCs) has been increased to 74% from 49%, a move aimed at bringing more foreign expertise in the segment.
However, FDI in ARCs would need to comply with the foreign direct investment (FDI) policy, including the one related with sectoral caps. Also, foreign investment limit of 74% in ARC would be a combined limit of FDI and FII (foreign institutional investors). With this change, “the prohibition on investment by FII in ARCs will be removed”, said the finance ministry. The shareholding of an FII shall not exceed 10% of the total paid-up capital, it said.
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