FDI Scheme Update: Govt Approval Needed for Commodity Exchange Investments; 100% FDI in Financial Leases Allowed Automatically.

The circular addresses amendments to the Foreign Direct Investment (FDI) Scheme concerning foreign investments in commodity exchanges and the Non-Banking Financial Company (NBFC) sector. It specifies that government approval is now required only for the FDI component in commodity exchanges, while investments by registered Foreign Institutional Investors (FIIs) do not require such approval. The FDI policy permits up to 100% investment in 'financial leases' under the automatic route, excluding 'operating leases.' The circular instructs banks to inform their clients and notes that necessary regulatory amendments will be notified separately.

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