New Delhi: The Department of Industrial Policy and Promotion has relaxed foreign direct investment norms to allow private sector banks like ICICI Bank and HDFC Bank to restructure borrowers' loans without considering such investments as indirect FDI.
Investment made by such majority foreign owned banks as part of restructuring corporate debt will not be counted as indirect FDI, DIPP said in a notification.
The revised guidelines, which comes into immediate effect, ensures that the FDI policy does not come in way of banks offering help to restructure loans of companies facing a tough time due to the economic slowdown.
However, any 'strategic downstream investment' by the banks like that in subsidiaries, joint ventures and associates will continue to be considered as indirect FDI, DIPP said.
The overall foreign holding in Indian private sector lenders HDFC Bank and ICICI Bank, is more than 50% after adding depository receipts, FII (Foreign Institutional Investor) investments and overseas corporate investments.