Definition of ‘control’ in relation to FDI notified by RBI

The Reserve Bank of India notified the definition of term ‘control’ in the context of Foreign Direct Investment (FDI) and revised the list of states where FDI is allowed in multi-brand retail.

What is ‘Control’ as per RBI notification?

‘Control’ shall include the right to appoint a majority of the directors or to control the management or policy decisions including by virtue of their shareholding or management rights or shareholders agreements or voting agreements. The tighter definition is to ensure foreign investors do not acquire indirect control in sectors where FDI is prohibited or capped at 49%.

States ready to implement FDI in Multi-Brand Trading:

The list of states which have given consent to implement FDI in Multi-Brand trading has been modified with the addition of Himachal Pradesh and Karnataka. With this, the number of states and Union Territories which have given consent to implement the FDI policy on multi-brand retail has increased to 12.

 Latest in FDI:

  • Norms for multi-brand retail trading have been relaxed and the mandatory 30% local sourcing norms for companies have also been eased.
  • FDI in insurance stands at 26%.

The cap in telecom enhanced to 100% with automatic route allowed for FDI of up to 49%.

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Categories: Banking Current Affairs 2017Business & Economy Current Affairs 2017

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