Foreign Investment Cap in Credit Information Companies Set at 49%
Current · Source: Reserve Bank of India · RBI/2007-2008/302 · issued 28 Apr 2008 · ~2 min read
Quick answerRBI now allows foreign investment up to 49% in Credit Information Companies, subject to FIPB approval and RBI clearance. FIIs can invest up to 24% via secondary market, with a 10% individual cap. This opens a regulated channel for foreign capital into credit bureaus.
The rule, in the simplest words
Foreign investors can own up to 49% of a credit information company’s total shares (49% means just under half of the company).
Any foreign investment must first get approval from the FIPB (the board that checks foreign money) and clearance from the RBI (the central bank).
SEBI‑registered foreign institutional investors (FIIs) can only buy shares that are already on the market (secondary market) and together they cannot buy more than 24% of the company.
No single FII is allowed to own more than 10% of the company’s shares, either directly or through other companies (10% means one out of ten shares).
Banks and lenders need to keep track of these limits and make sure all foreign investments stay within the 49% cap and the 10% individual cap.
How it plays out — a real example
A credit bureau officer in Mumbai, Ms. Sharma, receives a request from a foreign investor to buy 15% of the company’s shares. She checks the RBI guidelines, confirms that the total foreign investment is below 49%, ensures the investor is a SEBI‑registered FII, and arranges the purchase through the secondary market, keeping the investor’s stake under the 10% individual cap.
What changed
RBI amended the FDI scheme to permit foreign investment in Credit Information Companies, capping aggregate foreign investment at 49%. Within this, SEBI-registered FIIs can invest up to 24% only through secondary market purchases, and no single FII can hold more than 10% equity. All investments require prior FIPB approval and RBI regulatory clearance.
What it means for you
For banks and lenders, this allows foreign capital to flow into credit information companies, potentially improving data infrastructure and credit scoring models. The caps ensure domestic control remains with Indian entities, while FII participation is limited to secondary market trades. Banks dealing with these companies must ensure compliance with the 49% aggregate limit and individual FII caps.
What you must do
Update internal compliance systems to monitor aggregate foreign investment in Credit Information Companies against the 49% cap.
Ensure any FII investment in these companies is routed only through secondary market purchases and does not exceed 24% aggregate or 10% per FII.
Advise clients and constituents about the new FIPB approval and RBI clearance requirements for foreign investments in Credit Information Companies.
Review existing exposures to Credit Information Companies to ensure no breach of the new limits.
Who it affects
Category-I Authorised Dealer Banks, Credit Information Companies, Foreign Institutional Investors (FIIs), Foreign investors seeking to invest in Indian credit bureaus
❓ Common questions
What is the maximum foreign investment allowed in a Credit Information Company?
The aggregate foreign investment is capped at 49% of the equity, with prior FIPB approval and RBI regulatory clearance required.
Can FIIs invest in Credit Information Companies through primary market purchases?
No, FII investment is permitted only through secondary market purchases, and it is limited to 24% of the equity within the overall 49% foreign investment cap.
Is there a limit on individual FII holdings in a Credit Information Company?
Yes, no single FII can hold directly or indirectly more than 10% of the equity of a Credit Information Company.
📜 Read the original circular — full text as issued by RBI
RBI/2007-2008/302
A.P.
(DIR Series) Circular No.40
April 28, 2008
To,
All
Category – I Authorised Dealer Banks
Madam / Sir,
Foreign
investment in Credit Information Companies
- Amendment to the Foreign Direct
Investment Scheme
Attention of Authorised Dealer Category
- I (AD Category - I) banks is invited to Schedule I to Foreign Exchange Management
(Transfer or Issue of Security by a Person Resident Outside India) Regulations,
2000, notified vide FEMA
Notification No. 20/2000-RB dated May 3, 2000 , as amended from time to time.
2.
It has been decided in consultation with the Government of India to allow foreign
investment in Credit Information Companies in compliance with the Credit Information
Companies (Regulations) Act 2005 and subject to the following :
i) The aggregate Foreign Investment in Credit Information
Companies would be 49%.
ii) Foreign Investment upto 49% would be allowed
only with the prior approval of FIPB and regulatory clearance from RBI.
iii)
Investment by SEBI Registered FIIs would be permitted only through purchases
in the secondary market to an extent of 24%.
iv) Investment by SEBI Registered
FIIs would be within the overall limit of 49% for Foreign Investment.
v) No
FII can individually hold directly or indirectly more than 10% of the equity.
A copy of the Press
Note 1 (2008 series) dated March 12, 2008 issued by the Government is enclosed.
3. AD Category – I banks may bring the contents of this
circular to the notice of their constituents and customers concerned.
4.
Necessary amendments to the Foreign Exchange Management (Transfer or Issue of
Security by a Person Resident Outside India) Regulations, 2000 are being issued
separately.
5. The directions in this circular have been
issued under Sections 10(4) and 11(1) of Foreign Exchange Management Act, 1999
(42 of 1999) and is without prejudice to permissions / approvals, if any, required
under any other law.
Yours faithfully,
(Salim
Gangadharan)
Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-2008/302 · issued 28 Apr 2008. The plain-English explanation above is BankPulse’s own independent summary.
Update internal compliance systems to monitor aggregate foreign investment in Credit Information Companies against the 49% cap.
📜 Compliance
Ensure any FII investment in these companies is routed only through secondary market purchases and does not exceed 24% aggregate or 10% per FII.
Advise clients and constituents about the new FIPB approval and RBI clearance requirements for foreign investments in Credit Information Companies.
Review existing exposures to Credit Information Companies to ensure no breach of the new limits.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are an IT/Systems lead at a bank this circular applies to (Category-I Authorised Dealer Banks, Credit Information Companies, Foreign Institutional Investors (FIIs), Foreign investors seeking to invest in Indian credit bureaus), your first concrete step on “Foreign Investment Cap in Credit Information Companies Set at 49%” is: “Update internal compliance systems to monitor aggregate foreign investment in Credit Information Companies against the 49% cap.” (RBI issued this 28 Apr 2008).
Circular: RBI/2007-2008/302 -- Foreign Investment Cap in Credit Information Companies Set at 49%
Issued: 28 Apr 2008
Action required: Update internal compliance systems to monitor aggregate foreign investment in Credit Information Companies against the 49% cap.
Action required: Ensure any FII investment in these companies is routed only through secondary market purchases and does not exceed 24% aggregate or 10% per FII.
Action required: Advise clients and constituents about the new FIPB approval and RBI clearance requirements for foreign investments in Credit Information Companies.
Action required: Review existing exposures to Credit Information Companies to ensure no breach of the new limits.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4150&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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