From correspondents in Delhi, India, 09:02 PM IST

In a move to help non-banking financial companies (NBFCs) shore up capital to meet regulatory requirements and enhance business, the Reserve Bank of India (RBI) Friday allowed them to raise funds through perpetual debt instruments.

"Banks can raise funds through innovative perpetual debt instruments that can be part of their Tier-I capital. They are also allowed to raise upper Tier-II capital through issue of debt instruments," RBI said in a notification.

Under the new guideline, the minimum investment in each such issue by a single investor cannot not be less than Rs.500,000, and the funds raised will not be treated as "public deposit".

The amount of funds raised in excess of the amount admissible as Tier I shall qualify as Tier II capital within eligible limits, the RBI statement said.

(Staff Writer, © IANS)