NBFC

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Presented By-

Sunakshi Tiwari
 NBFC's is a company registered under the
Companies Act, 1956 .It is a financial companies
which are dealing in finance without banking
permission by government .These can deal in
shares,loans, FD's etc. but these are not
permitted to open the saving and current account
like a bank.
(i) A NBFC cannot accept demand deposits (demand deposits are
funds deposited at a depository institution that are payable on
demand -- immediately or within a very short period -- like your
current or savings accounts.)

(ii) It is not a part of the payment and settlement system and as such
cannot issue cheques to its customers; and

(iii) Deposit insurance facility of DICGC is not available for NBFC


depositors unlike in case of banks.

Is it necessary that every NBFC should be registered with


RBI?

 In terms of Section 45-IA of the RBI Act, 1934, it is mandatory


that every NBFC should be registered with RBI to commence or
carry on any business of non-banking financial institution as
defined in clause (a) of Section 45 I of the RBI Act, 1934.
The NBFCs that are registered with RBI are:
(i) equipment leasing company;
(ii) hire-purchase company;
(iii) loan company;
(iv) investment company.

With effect from December 6, 2006 the above


NBFCs registered with RBI have been reclassified
as
(i) Asset Finance Company (AFC)
(ii) Investment Company (IC)
(iii) Loan Company (LC)
What are the requirements for registration
with RBI?
Non-banking financial institution as defined under
Section 45 I(a) of the RBI Act, 1934 should have a
minimum net owned fund of Rs 25 lakh.
Can all NBFCs accept deposits and what are the
requirements for accepting public deposits?
 All NBFCs are not entitled to accept public deposits.

Only those NBFCs holding a valid certificate of


registration with authorisation to accept public
deposits can accept/hold public deposits.
i) The NBFCs are allowed to accept/renew public deposits for a minimum
period of 12 months and maximum period of 60 months. They cannot
accept deposits repayable on demand.
ii) NBFCs cannot offer interest rates higher than the ceiling rate
prescribed by RBI from time to time. The present ceiling is 11 per cent
per annum.
iii) NBFCs cannot offer gifts/incentives or any other additional benefit to
the depositors.
iv) NBFCs (except certain AFCs) should have minimum investment grade
credit rating.
v) The deposits with NBFCs are not insured.
vi) The repayment of deposits by NBFCs is not guaranteed by RBI.
vii) There are certain mandatory disclosures about the company in the
Application Form issued by the company soliciting deposits.
(i) Public deposits are unsecured.

(ii) A proper deposit receipt which should, besides the name of


the depositor/s state the date of deposit, the amount in
words and figures, rate of interest payable and the date of
maturity should be insisted. The receipt shall be duly signed
by an officer authorised by the company in that behalf.
(iii) The Reserve Bank of India does not accept any
responsibility or guarantee about the present position as to
the financial soundness of the company or for the
correctness of any of the statements or representations made
or opinions expressed by the company and for repayment of
deposits/discharge of the liabilities by the company.
THANK
YOU

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