Financial Daily from THE HINDU group of publications
Thursday, Jan 02, 2003
Financial Daily from THE HINDU group of publications Thursday, Jan 02, 2003 |
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Money & Banking
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Foreign Banks SE Asia's NBFC proposal rejected Ambarish Mukherjee
NEW DELHI, Jan. 1 THE Government has declined permission to South East Asia Bank to establish a wholly-owned non-banking finance company (NBFC) in India with a proposed capital investment of Rs 250 crore. The bank had recently sought approval from the Foreign Investment Promotion Board (FIPB) to set up an NBFC in India. The bank, in its application filed with the FIPB, had stated that it would invest Rs 250-crore in the equity of the proposed NBFC. The investment, according to the proposal, would be spread over a two-year period and the activities proposed were project financing and related financial services. The Government refusal comes in the wake of the feedback received from the High Commission of India, Wellington, that it is registered with the Registrar of Corporations, Republic of Nauru, and that the bank's registration was cancelled as early as in January 2002. The Government enquiries have further revealed that most of the companies and financial institutions registered in Nauru indulge in wrong-doings and do not enjoy good reputation. The bank has said in its application that the Reserve Bank of India (RBI) has permitted it to open a representative office in India in May 1998 for a period of three years. After the expiry of the period, when it approached the RBI for renewal of the permission, it has been advised to consider starting operations under the foreign direct investment window of NBFCs subject to fulfilment of the prescribed minimum capitalisation norms.
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