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Presenting the General Budget 2017-18 in the Lok Sabha on Wednesday, Feb. 1, 2017, Indian Finance Minister Arun Jaitley said that the Foreign Investment Promotion Board (FIPB) will be abolished in a phased manner by the end of fiscal year 2018-19.
Since the Government has already introduced substantive reforms in FDI policy with more than 90% of the total FDI inflows through the automatic route, Jaitley said that the FIPB has already completed the implementation of e-filing process for FDI. Hence, the FIPB has reached a stage where it can be phased out, he said.
On markets, the Finance Minister proposed that high net worth NBFCs can also now participate in IPOs just like the banks and insurance companies. He said a proposal to allow NBFCs regulated by RBI with a certain net worth, to be categorised as Qualified Institutional Buyers (QIBs) by SEBI so as to make them eligible for IPO route. The minister was actually hinting at prospective MBFC-MFIs or microfinance institutions which have a good record, work under RBI guidelines and seek to enter the IPO route to raise funds.
On banking reforms, he said a common application form for registration, opening of bank and demat accounts, and issue of PAN will be introduced for Foreign Portfolio Investors (FPIs) and said SEBI, RBI and CBDT will put in place the required plan and procedures, to enhance operational flexibility and ease of access to Indian capital markets. As for the commodities and securities derivative markets, he said they will be further integrated with the participants, brokers, and operational frameworks.
In an effort to improve the ease of doing business, the Indian Finance Minister said the process of registration of financial market intermediaries like mutual funds, brokers, portfolio managers, etc. will be made fully online by SEBI and steps will be taken for linking of individual demat accounts with Aadhar.
To check bank NPAs and enhance capital flows into the securitisation industry, Jaitley said that the listing and trading of Security Receipts issued by a securitisation company or a reconstruction company under the SARFAESI Act will be permitted in SEBI registered stock exchanges.
To ensure the Cyber security for safeguarding the integrity and stability of the financial sector, a Computer Emergency Response Team for our Financial Sector (CERT-Fin) will be established in coordination with all Financial Sector Regulators and other stakeholders, he added.
Addressing the issue of dubious or ponzi deposit schemes, Jaitley said that a Bill will soon be tabled in Parliament to protect the poor and gullible investors from dubious deposit schemes, operated by unscrupulous entities.
He said a draft bill has been placed in the public domain and will be introduced in parliament shortly seeking to amend the Act in consultation with various stakeholders, as part of our ‘Clean India’ agenda, he added.
