Mumbai: From now on, according to RBI rules, the foreign venture capital funds will have to disclose their financial statements for regulatory approval to invest in India. A number of applications of such funds have been sent back to the Securities and Exchange Board of India (SEBI) by RBI for not backing up by financial statements, reports Reena Zachariah of the Economic Times. The central bank has made the move so that only those players who are credible enough will get approval to start operations in India, according to securities lawyers. SEBI has already made it compulsory for foreign venture capital investors (FVCI) to obtain a firm commitment from their investors of at least $1 million. The apex bank is keen to ensure that to check whether these foreign entities are eligible to invest in the Indian market, due diligence is carried out. RBI is likely to accept the background details of the promoters or the parent to establish the credentials of the FVCI for all new entrants, said Suhail Nathani, Partner, Economic Laws Practice. Very often, to invest in India, a foreign venture capital fund usually forms an investment holding firm in Mauritius with not more than a few dollars, files for registration with Indian regulators and after getting approved it is the overseas investors in the scene. The financial statements rule could be to ensure the ability of the FVCI to invest at least the committed amount. However, difficulties may be faced by newly-formed FVCIs in providing financial statements, according to Vikram Shroff of Nishith Desai Associates. As on December 31, 2009, India has attracted 26,827 crore of investments through foreign venture capital funds, compared to domestic venture capital funds' 24,893 crore. There are 144 foreign venture capital funds registered with the market regulator, according to SEBI data.