Non banking finance companies (NBFCs) have been barred from setting up new branches overseas by the Reserve Bank of India. The existing offshore branches of NBFCs would however continue to be functional.

The NBFCs will be however permitted to open representative offices and subsidiaries in the international front.

Also, any investment by them in non financial activities would not be allowed, said RBI. Their total investment should not supercede the total net owned funds of these NBFCs.

"The overseas investment in a single entity, including its step-down subsidiaries, by way of equity or fund-based commitment, shall not be more than 15 per cent of the funds owned by NBFCs," RBI said.