New Delhi: Infusing energy in share market going through slow phase following global and domestic recession, the Centre has allowed Qualified Foreign Investors (QFI) for direct investment in Indian equity market.

It is expected that the move would attract foreign investors and increase inflow of funds in the country. According to the statement released by the Union Ministry of Finance, entry of QFI would widen the contours of share market and reduce market volatility.

Trying to raise the inflow of Foreign Capital inflow in Indian market, QFI will include investors who can directly pump in funds in Indian equity market. Presently, Foreign Institutional Investors/sub-accounts and Non-Resident Indians are allowed to directly invest in the Indian stock market.

Up till now, these investors were dependent on registered brokerage companies to fuel in the capital.

According to Finance Ministry, those QFI’s who will stick to the parameters set by Financial Action Task will get permission for investment. Notably, last year, government approved of USD 13 billion investment by QFIs on mutual funds and equity shares.

Besides, owing to the much clamor over 51 percent Foreign Direct Investment (FDI) in retail sector, the global investors pulled out Rs 3,000 crore from the market. Consequently, this had a direct impact on the rupee, which fell to its lowest market.

It is likely that the QFI policy would be operationlised by the Securities and Exchange Board of India from January 15.