There are minimum capitalisation norms for such investments. Besides, 100 per cent NBFC subsidiary can also be established subject to clearance by Foreign Investments Promotion Board (FIPB), Government of India. There has been noticeable increase in the interest of foreign entities to acquire stakes in NBFCs.
Policy initiatives have been taken in recent past to ensure that such NBFCs adhere to regulatory prescriptions spelt out for them. In the cooperative segment, the urban cooperative banks (UCBs) had been suffering from the problem of multiple supervisory/regulatory authorities, as also the challenge of reconciling the democratic character with financial discipline.