The Government has decided to rethink over the rules set by the foreign direct investment guidelines last year and allow 100% foreign owned NBFCs to set up subsidiaries in the country.

According to a government official, the RBI would be working on the changes to be implemented for the purpose.

As of now, NBFCs which are wholly foreign owned and brought in $ 50 million as capital are allowed to set up subsidiaries in India for specific activities. But they are not allowed to bring any additional capital.

The FDI guidelines last year had mandated that all Indian companies which are receiving downstream investments from foreign companies have to abide the specific sectoral conditions. As a result of this, all foreign owned NBFCs which had brought $50million had to recapitalise their subsidiaries again.

The changes to be brought about by RBI would come as a reliever to such companies.

"Requirement to bring $50 million at every level and in every downstream 100% subsidiary would be unreasonable and out of sync with business reality," said Akash Gupt, executive director at consulting firm PwC.