Foreign Investment in Other Financial Services Sector

In the Notification of Reserve Bank of India, Foreign Exchange Department Notification No.FEMA.375/2016-RB, dated 9 September 2016, there is amendment to Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, (Notification No. FEMA 20/2000-RB dated 3rd May 2000), in Schedule 1, in Annex B, Paragraph F.8 relating to Non-Banking Finance Companies (NBFC) in following manner:

1. Financial Services activities regulated by financial sector regulators, viz., RBI, SEBI, IRDA, PFRDA, NHB or any other financial sector regulator as may be notified by the Government of India are allowed under 100% Automatic Route.
2. The other financial services sectors are subject to some conditions, which are laid down by the concerned financial regulators.
3. Any activity which is specifically regulated by an Act, the foreign investment limits will be restricted to those levels/limit that may be specified in that Act, if so mentioned.
4. The financial services which are not regulated by any of the regulators as mentioned above may be allowed up to 100% under government approval route.
5. Downstream investments by any of the entities in Other Financial Services will be subject to extant sectoral regulations and notification as amended from time to time.

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Actio Personalis Moritur Cum Persona means a personal action dies with the person

In the matter of Sakthi Finance Limited (hereinafter referred as 'SFL') SEBI was evaluating

alleged violation done by the promoters and Person Acting in Concert ('PAC') of SFL. In

adjudication process it was brought to the notice of adjudication ofcer that one of the PAC

(late Mr. N Mahalingam) had passed away.

Question was arisen whether in such cases right to sue will survive against the

representative of the deceased person?

Adjudication ofcer noted that in the case of Girijandini vs. Bijendra Narain (AIR 1967

SC 2110), the Hon'ble Supreme Court, inter-alia observed that in case of personal action,

i.e. the actions where the relief sought is personal to the deceased, the right to sue will not

survive to or against the representatives, and in such cases, the maxim actio personalis

moritur cum persona (personal action dies with the death of the person) would apply.

By taking note of the above referred judgement, since the proceedings were initiated

against the personal acts and omission of a person who is not alive to face the penalty, the

matter in respect of Mr. N. Mahalingam disposed off without going into merits of the case.