DIPP relaxes FDI norms for banks

The Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce and Industry on Wednesday issued a notification saying any kind of corporate debt restructuring or loan restructuring mechanism will not be counted as foreign direct investment (FDI) in those banks which have foreign entities as majority shareholders. Earlier, any kind downstream investment by an Indian company that is owned by foreign entities into another Indian company would be regarded as FDI subjected to sectoral limits. The DIPP also clarified its position on Wednesday on downstream investments made by Indian companies that have more 50 per cent foreign equity and are categorized as foreign firms for investment purposes. However, it has not changed the policy per se.