The Reserve Bank of India (RBI), Country's Central bank, has given its nod to Australia-based Macquarie Group's company - Macquarie Finance India (MFIPL) - to start non-banking finance activities in India. The company will commence operations in December, a senior official said.

This nod by RBI to Macquarie into this space comes at a crucial time when some other foreign players have been struggling.

MFIPL, which is a wholly-owned subsidiary of the Macquarie Group, will provide an onshore financing vehicle for clients of Macquarie India, say the officials. According to Macquarie Securities Group MD Christian Drysdale "The NBFC registration provides opportunities for other businesses within the Macquarie Group to commence activities here in India".

$15 million has been invested by Macquarie Group in MFIPL and is expected to raise money in order to support the anticipated growth of the business. MFIPL will provide specialized financing products to corporates and high net worth individuals (HNIs). These financing activities are expected to complement Macquaire Group's other non-banking activities in India that include i-banking as well as advisory and institutional equities broking and trading.

Meanwhile, RBI has set stiff terms for new bank licences.

The Central bank is considering a cap of 50 per cent on foreign investment in new banks with a lock in period of 10-year and keeping out corporate groups involved in real estate business. Moreover, the banks are now allowed to have foreign shareholding of up to 74 per cent, out of which 49 per cent can be held by foreign institutional investors and 24 per cent by non-resident Indians.