Shadow Banks in India

8/11/2019 Shadow Banks in India

http://slidepdf.com/reader/full/shadow-banks-in-india 1/22

Shadow Banks in India Do we have shadow banks in India? The answer is yes. It is yes, because we have financial institutions which accept deposits andextend credit like banks, but we do not call them shadow banks; we call them the Non-Banking Finance Companies (NBFCs). Arethey in fact shadow banks? No, because these institutions have been under the regulatory structure of the Reserve Bank of India,right from 1963 i.e. 50 full years before the developed west is doing so. Evolution of Regulation of NBFCs in India In the wake of failure of several banks in the late 1950s and early 1960s in India, large number of ordinary depositors lost their

money. This led to the formation of the Deposit Insurance Corporation by the Reserve Bank, to provide guarantee t o the depositors.(Later by adding a credit guarantee element, it became the DICGC). While this provided the necessary safety net for the bankdepositors, the Reserve Bank did note that there were deposit taking activities undertaken by non-banking companies. Though theywere not systemically as important as the banks, the Reserve Bank initiated regulating them, as they had the potential to cause painto their depositors. Later in 1996, in the wake of the failure of a big NBFC, the Reserve Bank tightened the regulatory structure over the NBFCs, withrigorous registration requirements, enhanced reporting and supervision. Reserve Bank also decided that no more NBFC will bepermitted to raise deposits from the public. Later when the NBFCs sourced their funding heavily from the banking system, it raisedsystemic risk issues. Sensing that it can cause financial instability, the Reserve Bank brought asset side prudential regulations ontothe NBFCs. NBFCs of India The definition of the term NBFC entails a very wide meaning. NBFCs include not just the finance companies that the general publicis largely familiar with; the term also entails wider group of companies that are engaged in investment business, insurance, chit fund,nidhi, merchant banking, stock broking, alternative investments, etc. as their principal business. Today I would be concentrating onlyon those NBFCs that are under the regulatory purview of the Reserve Bank. Traditionally, India has had a bank-dominated financial sector. Even so, there have always been NBFCs. These were in early timessmall family run businesses for deposits acceptance and lending activities. Even today, the sector may be small as compared tobanking sector with a total asset size of just around 14 percent of that of scheduled commercial banks (other than RRBs). However,there is no denying that the sector has grown tremendously over the years in size, form and complexity, with some of the NBFCsoperating as conglomerates having business interests spread to sectors like insurance, broking, mutual fund and real estate.Concomitant with the above, interconnectedness and systemic importance of the NBFC sector also have increased. NBFCs being financial intermediaries are engaged in the activity of bringing the saving and the investing community together. In thisrole they are perceived to be playing a complimentary role to banks rather than competitors, as it is a known fact that majority of thepopulation in the country do not yet have access to mainstream financial products and services including a bank account andtherefore the country needs institutions beyond banks for reaching out in areas where banks presence may be lesser. Thus NBFCsespecially those catering to the urban and rural poor namely NBFC-MFIs and Asset Finance Companies have a complimentary rolein the financial inclusion agenda of the country. Further, some of the big NBFCs viz; infrastructure finance companies are engagedin lending exclusively to the infrastructure sector and some are into factoring business, thereby giving fillip to the growth anddevelopment of the respective sector of their operations. Thus NBFCs have also carved niche business areas for them within the

financial sector space and are also popular for providing customized products like second hand vehicle financing, mostly at thedoorstep of the customer. In short, NBFCs bring the much needed diversity to the financial sector thereby diversifying the ri sks,increasing liquidity in the markets thereby promoting financial stability and bringing efficiency to the financial sector.

At the same time, their growing size and interconnectedness also raise concerns on financial stability. Reserve Banks endeavour inthis context has been to streamline NBFC regulation, address the risks posed by them to financial stability, address depositors andcustomers interests, address regulatory arbitrage and help the sector grow in a healthy and efficient manner. Some of the regulatorymeasures include identifying systemically important non-deposit taking NBFCs as those with asset size of Rs. 100 crore and aboveand bringing them under stricter prudential norms (CRAR and exposure norms), issuing guidelines on Fair Practices Code, aligningthe guidelines on restructuring and securitization with that of banks, permitting NBFCs-ND-SI to issue perpetual debt instrumentsetc. NBFCs as components of the financial sector:

A broad picture of the role of NBFCs and the interconnectedness they have in the financial sector can be gauged from the detailsgiven below: General: The total number of NBFCs as on March 31, 2014 are 12,029 of which deposit taking NBFCs are 241 and non-deposit takingNBFCs with asset size of Rs. 100 crore and above are 465, non-deposit taking NBFCs with asset size between Rs. 50 croreand Rs.100 crore are 314 and those with asset size less than Rs. 50 crore are 11009. As on March 31, 2014, the average leverageratio (outside liabilities to owned fund) of the NBFCs-ND-SI stood at 2.94, return on assets (net profit as a percentage of totalassets) stood at 2.3%, Return on equity (net profit as a percentage of equity) stood at 9.22 % and the gross NPA as a percentage oftotal credit exposure (aggregate level) stood at 2.8%. Asset Liability composition Liabilities* of the NBFC sector: Owned funds (23% of total liabilities), debentures (32%), bank borrowings (21%), deposit (1%), borrowings from FinancialInstitutions (1%), Inter-corporate borrowings (2%), Commercial Paper (3%), other borrowings (12%), and current liabilities &provisions (5%).



Assets* of the NBFC sector: Loans & advances (73% of total assets), investments (16%), cash and bank balances (3%), other current assets (7%) and otherassets (1%). (The data pertains to only reported deposit taking NBFCs and those non-deposit taking NBFCs with asset sizeof Rs.100 crore and above. All figures are as on end March, 2014.) Role of NBFCs in financial inclusion Financial inclusion has been defined as the provision of affordable financial services to those who have been left unattended orunder-attended by formal agencies of the financial system. These financial services include payments and remittance facilities,

savings, loan and insurance services. Micro finance has been looked upon as an important means of financial inclusion in Indi a.Microfinance is not just provision of micro credit but also other services in small quantities to the poor i.e. providing essentialfinancial services to the poor in an affordable way. Financial Inclusion also is aiming at the same by providing the poor with not onlydeposit accounts or credit but also insurance and remittance facility.

As articulated by the Committee on Comprehensive Financial Services for Small Businesses and Low Income Households (MorCommittee) in its report, on both Financial Inclusion (defined as the spread of financ ial institutions and financial services across thecountry) and Financial Depth (defined as the percentage of credit to GDP at various levels of the economy) the overall situationremains very poor and, on a regional and sectoral basis, very uneven. While the Reserve Banks model for financial inclusion is essentially bank-led, we believe that non-bank entities do have space topartner banks in the financial inclusion initiatives. We have enabled non-bank entities as Business Correspondents of banks toachieve the larger goal of financial inclusion. Since September 2010, MFIs that are bank-SHGs, Trusts, Societies or Section 25companies have been permitted to become Banking Correspondents (BCs). At the same time several non-bank entities on their ownare part and parcel of this greater goal, for e.g. NBFC-MFIs that form the significant part of the MFI sector have deeper reach in therural areas. NBFC-MFIs do not formally figure in the bank led model of financial inclusion but they by their wider and deeper reachcan be catalysts in providing the necessary handhold to the poor borrowers to gain access to essential financial services. While the new banks that are being envisaged would definitely give fillip to the countrys financial inclusion initiatives, juxtaposing thehumungous task of complete financial inclusion against it also brings to focus the need for exploring alternative ways to achieve thegoal. The Mor Committee has observed that each of the channels, be they large National Banks, regional cooperative banks, orNon-Banking Financial Companies (NBFCs) have a great deal of continuing value to add by focusing on its own differentiatedcapabilities and accomplish the national goals of financial inclusion by partnering with others that bring complementary capabilitiesto bear on the problem. Role of NBFCs in capital market Investment activity of NBFC sector comprises around 16% of their total assets. These constitute mainly investments in capitalmarket. There are specialized NBFCs that are exclusively engaged in capital market investment i.e. trading in securities. TheseNBFCs therefore help in giving liquidity to the capital market. Further, NBFCs also lend to investors for investing in capital market.Regulatory challenges in this regard might come in the form of probable overheating of the market, which could be addressedthrough appropriate regulatory measures including enhanced disclosures. Role of NBFCs in factoring Factoring as defined in the Factoring Regulation Act, 2011 involves acquisition of receivables (by a Factor) thereby getting entitled

to undivided interest on the receivables or financing against the security interest over any receivables but does not include creditfacilities provided by a bank in its ordinary course of business against security of receivables. Subsequent to the notification of theFactoring Regulation Act by the Government, Reserve Bank formed a new category of NBFCs called NBFC-Factors and issueddirections to them. NBFC-Factors are almost exclusively engaged in providing factoring service. Factoring service which isperceived as complimentary to bank finance is expected to enable the availability of much needed working capital finance for thesmall and medium scale industries especially those that have good quality receivables but may not be in a position to obtain enoughbank finance due to lack of collateral or credit profile. By having a continuous business relationship with the Factor in place, smalltraders, industries and exporters get the advantage of improving the cash flow and liquidity of their business as also availingancillary services like sales ledger accounting, collection of receivables, credit protection etc. Factoring helps them to free theirresources and have a one stop arrangement for various business needs enabling smooth running of their business. The Reserve Bank has recently also taken the initiative of mooting a Trade Receivables and Credit Exchange for financing of Micro,Small and Medium Enterprises, which is under development stage. The exchange will bring together the MSMEs, the Factors andthe corporate buyers under one platform whereby MSMEs bills against large companies can be accepted electronically andauctioned so that MSMEs are paid promptly. The objective is to build a suitable institutional infrastructure which will not only enablean efficient and cost effective factoring / reverse factoring process to be put in place, but also ensure sufficient liquidity is created forall stakeholders through an active secondary market for the same. Role of NBFCs in vehicle financing / second hand vehicle financing Talking about the niche sectors that NBFCs cater to, vehicle financing especially second hand vehicles need special mention.Certain NBFCs that are classified as Asset Finance Companies have gained expertise in this segment and play a significant role inproviding a livelihood to customers who are drivers. From the Reserve Banks side, to encourage the productive activity that theseNBFCs are engaged in, we have accorded certain additional dispensations to them in the form of enhanced bank credit, higherexposure norm ceiling and provision of ECB under automatic route for leasing related to infrastructure. Role of NBFCs in infrastructure financing Infrastructure Finance Companies and Infrastructure Debt Funds are NBFCs exclusively into financing the infrastructure sector.Some of these companies have asset books running to lakhs of crores of rupees and are experts in long term project financing.





started pulling out their investments in liquid and money market funds. Mutual funds being the major subscribers to CPs anddebentures issued by NBFCs, the redemption pressure on MFs translated into funding issues for NBFCs, as they found raising freshliabilities or rolling over of the maturing liabilities very difficult. Drying up of these sources of funds along with the fact that bankswere increasingly becoming risk averse, heightened their funding problems, exacerbating the liquidity tightness. The Reserve Bankundertook many measures, both conventional as well as un-conventional, to enhance availability of liquidity to NBFCs. Conclusion To conclude, I may say that the challenge therefore for the NBFC sector is to grow in a prudential manner while not stopping

altogether on financial innovations. The key lies in having in place adequate risk management systems and procedures beforeentering into risky areas. As for the regulator, it is the constant endeavour of Reserve Bank to enable prudential growth of thesector, keeping in view the multiple objectives of financial stability, consumer and depositor protection, and need for more players inthe financial market, addressing regulatory arbitrage concerns while not forgetting the uniqueness of NBFC sector. The Bankpresently is in the process of reviewing the regulatory framework for NBFCs in the context of recent developments including theNachiket Mor Committee and others.

High interest rates, regulatory changes to impact NBFCs: Ehsan Syed,Fitch RatingsThe concerns as we have highlighted are that there is going to be a cyclical impact from the moderating economic growth and continued highinterest rates, which will have an impact on the asset quality. Then the other point is of course the regulatory changes. Some of these areproposed and some of these are already implemented.

But while the regulatory environment changing for NBFCs clearly is a concern, why would you list out credit costs or rather highcredit costs as a concern because we are at the top of the rate cycle, the cycle is going to turn and that should in a sense benefitNBFCs? One of the key asset classes for these NBFCs as we highlighted in the report also is the heavy and medium commercial vehicles and basedon our study of the correlation of the sales of these vehicles with IIP and then in turn the correlation of the IIP with repo rates, we see there isalways a lag.So, even if the interest rate starts to come down in the coming few months, there would be a lag of several months for this key asset class topick up and that's why we think the credit costs will remain high and at the same time, the growth in this key asset class will also be lower.Besides, we have the construction equipment, financing and also like loans against property and small business loans and some of theNBFCs where we remain negative.

You have listed out a few of the concerns, regulatory changes, the funding access worsening as well as profitability underpressure, but would you say that amongst these as well as the asset quality deterioration that would be one of the biggestconcerns given the cyclical headwinds that would affect the asset quality, which in turn would slow down the loan growth for mostof these companies? I do not think this is a game changer but of course this is a cyclical factor, which will increase the credit cost but this is not a game changer inthe medium term. As the economy again grows, interest rate cycle turns like gradually in the medium term, this is not a large concern for us.

We have got scores of NBFCs dotted across the country now with regulatory changes coming into force. Do you expect to see alarge scale consolidation in this sector or would you say that many of the very small players are just going to vanish? Coming to the last point like the smaller plays, there would be like a consolidation at that segment. There is bound to be. The regulations ofabout like increased asset sizes and increased net worth requirements would in itself lead to consolidation in that segment.

As per the report you are saying, Fitch expects the heavy and medium commercial vehicle financing to remain the weakest in 2012.Could you just run us through the rationale for the same? I explained it earlier as we talked of the correlation study that we have done between the sales of the heavy and medium commercialvehicles and the index of industrial production. There has been a positive correlation. We have done another study with repo rates.

What factors should we expect will change your outlook on NBFCs going forward? There are three factors. One is the cyclical impact on the credit costs, which if the economy turns down, then this should take care of thecredit cost like from the later half of this year and early part of next year. The second thing is about funding costs. Funding costs are linked to

regulation.

The third point, which is like the priority sector lending, which was like a key channel for the NBFCs that has basically from the start of thisyear being close, so now we had another committee which has recommended that on selected basis and based on like increased duediligence, the bank lending to NBFCs, there are all kinds of conditions could be considered as a priority sector.

Now, depending on how soon this recommendation and in what form this is finally implemented, this could have an impact on the fundingcosts. So regulatory changes obviously are one of the major factors besides the cyclical factors. So we will have to see if the economy againstarts, like the GDP growth starts to increase and like in turn the IIP starts to increase, that would change the overall sentiment for the keyasset classes. And this can change the outlook.

http://economictimes.indiatimes.com/topic/IIP






Q.1. What is Factoring?

The Factoring Act, 2011 defines the „ Factoring Business as “ the business of acquisition of receivables of assignor by accepting assignmentof such receivables or financing, whether by way of making loans or advances or in any other manner against the security interest over anyreceivables” . However, credit facilities provided by banks in the ordinary course of business against security of receivables and any activityundertaken as a commission agent or otherwise for sale of agricultural produce or goods of any kind whatsoever and related activities areexpressly excluded from the definition of Factoring Business. The Factoring Act has laid the basic legal framework for factoring in India.

Q 2. What is an NBFC-Factor?

Ans. NBFC- Factor means a non-banking financial company fulfilling the Principal business criteria i.e. whose financial assets in the factoringbusiness constitute at least 75 percent of its total assets and income derived from factoring business is not less than 75 percent of its grossincome, has Net Owned Funds of Rs. 5 crore and has been granted a certificate of registration by RBI under section 3 of the FactoringRegulation Act, 2011.

Q 3. What are the entry point norms for NBFC-Factor?

Ans, Every company registered under Section 3 of the Companies Act 1956 seeking registration as NBFC-Factor shall have a minimum NetOwned Fund (NOF) of Rs. 5 crore. Existing companies seeking registration as NBFC-Factor but do not fulfil the NOF criterion of Rs. 5 croremay approach the Bank for time to comply with the requirement.

Q 4. What would happen with the existing companies registered with RBI as NBFCs and conducting factoring business thatconstitute less than 75 percent of total assets / income?

Ans. Such a company shall have to submit to RBI, a letter of its intention either to become a Factor or to unwind the business totally, and aroad map to this effect. The company would be granted CoR as NBFC-Factor only after it complies with the twin criteria of financial assetsand income. If the company does not comply within the period as specified by the Bank, it would have to unwind the factoring business.

Q 5. Is it compulsory for all entities to get registered with RBI to conduct factoring business?

Ans. Yes. An entity not registered with the Bank may not conduct the business of factoring unless it is an entity mentioned in Section 5 of the Act i.e. a bank or any corporation established under an Act of Parliament or State Legislature, or a Government Company as defined undersection 617 of the Companies Act, 1956.

Q.6. If a company does not fulfill the principal business criteria for factoring and has no intention of getting itself registered as aFactor with the Bank, can it continue to do factoring activities with its group entities.

Ans : No. As per Section 3 of the Factoring Act 2011, no Factor can commence or carry on the factoring business without a) obtaining aCoR from the Reserve Bank, b) fulfilling the principal business criteria.

Q.7. Can NBFC-Factors undertake Import and Export Factoring?

Ans : Yes, however, such NBFC-Factors will need to obtain the necessary authorization from the Foreign Exchange Department of the Bankunder FEMA 1999 as amended and adhere to all the FEMA regulations in this regard.

Q.8 Is it necessary for NBFC-Factors to register every factoring transaction with the Central Registry?

Under Section 19 of the Factoring Act, 2011 every Factor is under obligation to file the particulars of every transaction of assignment ofreceivables in his favour with the Central Registry to be set-up under section 20 of the Securitisation and Reconstruction of Financial Assetsand Enforcement of Security Interest Act, 2002 (54 of 2002), within a period of thirty days from the date of such assignment or from the dateof establishment of such registry, as the case may be.

Q.9 Do NBFC-Factors have to comply with a separate set of prudential regulations?

Ans : No, The provisions of Non-Banking Financial (Non-deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank)Directions, 2007 or Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, asthe case may be and as applicable to a loan company shall apply to an NBFC-Factor.

Q.10. Are there a separate set of Returns that the NBFC-Factor has to submit?

Ans : The submission of returns to the Reserve Bank will be as specified presently in the case of registered NBFCs.



Non-Banking Financial Companies

FOREWORD

The Reserve Bank of India is entrusted with the responsibility of regulating and supervising the Non-Banking Financial Companies by virtue

of powers vested in Chapter III B of the Reserve Bank of India Act, 1934. The regulatory and supervisory objective, is to:

a) ensure healthy growth of the financial companies;

b) ensure that these companies function as a part of the financial system within the policy framework, in such a manner that their existenceand functioning do not lead to systemic aberrations; and that

c) the quality of surveillance and supervision exercised by the Bank over the NBFCs is sustained by keeping pace with the developmentshat take place in this sector of the financial system.

It has been felt necessary to explain the rationale underlying the regulatory changes and provide clarification on certain operational mattersfor the benefit of the NBFCs, members of public, rating agencies, Chartered Accountants etc. To meet this need, the clarifications in theform of questions and answers, is being brought out by the Reserve Bank of India (Department of Non-Banking Supervision) with the hopehat it will provide better understanding of the regulatory framework.

The information given in the FAQ is of general nature for the benefit of depositors/public and the clarifications given do not substitute theextant regulatory directions/instructions issued by the Bank to the NBFCs.

Frequently Asked Questions on NBFCs

1. What is a Non-Banking Financial Company (NBFC)?

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans andadvances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securitiesof a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business ishat of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and

sale/purchase/construction of immovable property. A non-banking institution which is a company and has principal business of receivingdeposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner, is also anon-banking financial company (Residuary non-banking company).

2. NBFCs are doing functions similar to banks. What is difference between banks & NBFCs ?

NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few differences as given below:

i. NBFC cannot accept demand deposits;

ii. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;

iii. deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in caseof banks.

3. Is it necessary that every NBFC should be registered with RBI?

In terms of Section 45-IA of the RBI Act, 1934, no Non-banking Financial company can commence or carry on business of a non-bankingfinancial institution without a) obtaining a certificate of registration from the Bank and without having a Net Owned Funds of Rs. 25 lakhs(Rs two crore since April 1999). However, in terms of the powers given to the Bank. to obviate dual regulation, certain categories of NBFCswhich are regulated by other regulators are exempted from the requirement of registration with RBI viz. Venture Capital Fund/MerchantBanking companies/Stock broking companies registered with SEBI, Insurance Company holding a valid Certificate of Registration issuedby IRDA, Nidhi companies as notified under Section 620A of the Companies Act, 1956, Chit companies as defined in clause (b) o f Section2 of the Chit Funds Act, 1982,Housing Finance Companies regulated by National Housing Bank, Stock Exchange or a Mutual Benefitcompany.



4. What are the different types/categories of NBFCs registered with RBI?

NBFCs are categorized a) in terms of the type of liabilities into Deposit and Non-Deposit accepting NBFCs, b) non deposit taking NBFCs byheir size into systemically important and other non-deposit holding companies (NBFC-NDSI and NBFC-ND) and c) by the kind of activityhey conduct. Within this broad categorization the different types of NBFCs are as follows:

i. Asset Finance Company(AFC) : An AFC is a company which is a financial institution carrying on as its principal business the

financing of physical assets supporting productive/economic activity, such as automobiles, tractors, lathe machines, generato rsets, earth moving and material handling equipments, moving on own power and general purpose industrial machines. Principalbusiness for this purpose is defined as aggregate of financing real/physical assets supporting economic activity and incomearising therefrom is not less than 60% of its total assets and total income respectively.

ii. Investment Company (IC) : IC means any company which is a financial institution carrying on as its principal business theacquisition of securities,

iii. Loan Company (LC): LC means any company which is a financial institution carrying on as its principal business the providingof finance whether by making loans or advances or otherwise for any activity other than its own but does not include an AssetFinance Company.

iv. Infrastructure Finance Company (IFC): IFC is a non-banking finance company a) which deploys at least 75 per cent of its totalassets in infrastructure loans, b) has a minimum Net Owned Funds of Rs. 300 crore, c) has a minimum credit rating of „A „orequivalent d) and a CRAR of 15%.

v. Systemically Important Core Investment Company (CIC-ND-SI): CIC-ND-SI is an NBFC carrying on the business ofacquisition of shares and securities which satisfies the following conditions:-

(a) it holds not less than 90% of its Total Assets in the form of investment in equity shares, preference shares, debt or loans ingroup companies;

(b) its investments in the equity shares (including instruments compulsorily convertible into equity shares within a period notexceeding 10 years from the date of issue) in group companies constitutes not less than 60% of its Total Assets;

(c) it does not trade in its investments in shares, debt or loans in group companies except through block sale for the purpose ofdilution or disinvestment;

(d) it does not carry on any other financial activity referred to in Section 45I(c) and 45I(f) of the RBI act, 1934 except investmentin bank deposits, money market instruments, government securities, loans to and investments in debt issuances of groupcompanies or guarantees issued on behalf of group companies.

(e) Its asset size is Rs 100 crore or above and

(f) It accepts public funds

vi. Infrastructure Debt Fund: Non- Banking Financial Company (IDF-NBFC) : IDF-NBFC is a company registered as NBFC tofacilitate the flow of long term debt into infrastructure projects. IDF-NBFC raise resources through issue of Rupee or Dollardenominated bonds of minimum 5 year maturity. Only Infrastructure Finance Companies (IFC) can sponsor IDF-NBFCs.

vii. Non-Banking Financial Company - Micro Finance Institution (NBFC-MFI): NBFC-MFI is a non-deposit taking NBFC havingnot less than 85%of its assets in the nature of qualifying assets which satisfy the following criteria:

a. loan disbursed by an NBFC-MFI to a borrower with a rural household annual income not exceeding Rs. 60,000 or urban andsemi-urban household income not exceeding Rs. 1,20,000;

b. loan amount does not exceed Rs. 35,000 in the first cycle and Rs. 50,000 in subsequent cycles;

c. total indebtedness of the borrower does not exceed Rs. 50,000;

d. tenure of the loan not to be less than 24 months for loan amount in excess of Rs. 15,000 with prepayment without penalty;

e. loan to be extended without collateral;

f. aggregate amount of loans, given for income generation, is not less than 75 per cent of the total loans given by the MFIs;

g. loan is repayable on weekly, fortnightly or monthly instalments at the choice of the borrowerviii. Non-Banking Financial Company – Factors (NBFC-Factors): NBFC-Factor is a non-deposit taking NBFC engaged in the

principal business of factoring. The financial assets in the factoring business should constitute at least 75 percent of its totalassets and its income derived from factoring business should not be less than 75 percent of its gross income.

5. What are the requirements for registration with RBI?

A company incorporated under the Companies Act, 1956 and desirous of commencing business of non-banking financial institution asdefined under Section 45 I(a) of the RBI Act, 1934 should comply with the following:

i. it should be a company registered under Section 3 of the companies Act, 1954



ii. It should have a minimum net owned fund of Rs 200 lakh. (The minimum net owned fund (NOF) required for specialized NBFCs likeNBFC-MFIs, NBFC-Factors, CICs is indicated separately in the FAQs on specialized NBFCs)

6. What is the procedure for application to the Reserve Bank for Registration?

The applicant company is required to apply online and submit a physical copy of the application along with the necessary documents to theRegional Office of the Reserve Bank of India. The application can be submitted online by accessing RBI s secured

website https://cosmos.rbi.org.in . At this stage, the applicant company will not need to log on to the COSMOS application and hence userids are not required.. The company can click on “CLICK” for Company Registration on the login page of the COSMOS Application. Awindow showing the Excel application form available for download would be displayed. The company can then download suitableapplication form (i.e. NBFC or SC/RC) from the above website, key in the data and upload the application form. The company ma y note toindicate the correct name of the Regional Office in the field “C -8” of the “Annex -Identification Particulars” in the Excel application form. Thecompany would then get a Company Application Reference Number for the CoR application filed on-line. Thereafter, the company has tosubmit the hard copy of the application form (indicating the online Company Application Reference Number, along with the supportingdocuments, to the concerned Regional Office. The company can then check the status of the application from the above mentioned secureaddress, by keying in the acknowledgement number.

7. What are the essential documents required to be submitted along with the application form to the Regional Office of theReserve Bank?

A hard copy of the application form is available at www.rbi.org.in → Site Map → NBFC List → Forms and Returns. An indicative checklist ofhe documents required to be submitted along with the application can be accessed from www.rbi.org.in → Site Map → NBFC List →

Forms and Returns → Documents required for registration as NBFCs.

8. Where can one find list of Registered NBFCs and instructions issued to NBFCs?

The list of registered NBFCs is available on the web site of Reserve Bank of India and can be viewed at www.rbi.org.in → Sitemap →NBFC List. The instructions issued to NBFCs from time to time are also hosted at www.rbi.org.in → Sitemap → NBFC List. → NBFCNotifications, besides, being issued through Official Gazette notifications and press releases.

9. Can all NBFCs accept deposits?

All NBFCs are not entitled to accept public deposits. Only those NBFCs to which the Bank had given a specific authorisation are allowed toaccept/hold public deposits.

10. Is there any ceiling on acceptance of Public Deposits? What is the rate of interest and period of deposit which NBFCs canaccept?

Yes, there is a ceiling on acceptance of Public Deposits by NBFCs authorized to accept deposits.. An NBFC maintaining required minimumNOF,/Capital to Risk Assets Ratio (CRAR) and complying with the prudential norms can accept public deposits as follows:

Category of NBFC having minimum NOF ofRs 200 lakhs

Ceiling on public deposit

AFC* maintaining CRAR of 15% without creditrating

1.5 times of NOF or Rs 10crore whichever is less

AFC with CRAR of 12% and having minimuminvestment grade credit rating

4 times of NOF

LC/IC** with CRAR of 15% and having minimuminvestment grade credit rating

1.5 times of NOF

* AFC = Asset Finance Company** LC/IC = Loan company/Investment Company

As has been notified on June 17, 2008 the ceiling on level of public deposits for NBFCs accepting deposits but not having minimum NetOwned Fund of Rs 200 lakh is revised as under:

Category of NBFC having NOF morethan Rs 25 lakh but less than Rs 200 lakh

Revised Ceiling on public depo

CRAR of 15% without credit rating Equal to NOF

of 12% and having minimum investment grade credit rating 1.5 times of NOF

https://cosmos.rbi.org.in/



http://www.rbi.org.in/



















LCs/ICs with CRAR of 15% and having minimum investment grade credit rating Equal to NOF

Presently, the maximum rate of interest an NBFC can offer is 12.5%. The interest may be paid or compounded at rests not shorter thanmonthly rests

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.

11. What are the salient features of NBFCs regulations which the depositor may note at the time of investment?

Some of the important regulations relating to acceptance of deposits by NBFCs are as under:

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 12.5 percent per annum. The interest may be paid or compounded at rests not shorter than monthly rests.

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. Certain mandatory disclosures are to be made about the company in the Application Form issued by the company soliciting

deposits.

12. What is ‘deposit’ and ‘public deposit’? Is it defined anywhere?

The term „deposit is defined under Section 45 I(bb) of the RBI Act, 1934. „Deposit includes and shall be deemed always to have includedany receipt of money by way of deposit or loan or in any other form but does not include:

i. amount raised by way of share capital, or contributed as capital by partners of a firm;ii. amount received from a scheduled bank, a co-operative bank, a banking company, Development bank, State Financial

Corporation, IDBI or any other institution specified by RBI;iii. amount received in ordinary course of business by way of security deposit, dealership deposit, earnest money, advance against

orders for goods, properties or services;iv. amount received by a registered money lender other than a body corporate;v. amount received by way of subscriptions in respect of a „Chit .

Paragraph 2(1)(xii) of the Non- Banking Financial Companies Acceptance of Public Deposits ( Reserve Bank) Directions, 1998 defines a „

public deposit as a „deposit as defined under Section 45 I(bb) of the RBI Act, 1934 and further excludes the following:

i. amount received from the Central/State Government or any other source where repayment is guaranteed by Central/StateGovernment or any amount received from local authority or foreign government or any foreign citizen/authority/person;

ii. any amount received from financial institutions specified by RBI for this purpose;iii. any amount received by a company from any other company;iv. amount received by way of subscriptions to shares, stock, bonds or debentures pending allotment or by way of calls in advance

if such amount is not repayable to the members under the articles of association of the company;v. amount received from shareholders by private company;vi. amount received from directors or relative of the director of an NBFC;vii. amount raised by issue of bonds or debentures secured by mortgage of any immovable property or other asset of the company

subject to conditions;viii. the amount brought in by the promoters by way of unsecured loan;ix. amount received from a mutual fund;x. any amount received as hybrid debt or subordinated debt;xi. any amount received by issuance of Commercial Paper.xii. any amount received by a systemically important non-deposit taking non- banking financial company by issuance of „perpetual

debt instruments xiii. any amount raised by the issue of infrastructure bonds by an Infrastructure Finance Company

Thus, the directions exclude from the definition of public deposit, amount raised from certain set of informed lenders who can makeindependent decision.

13. Are Secured debentures treated as Public Deposit? If not who regulatesthem?

Debentures secured by the mortgage of any immovable property of the company or by any other asset or with an option to convert theminto shares in the company, if the amount raised does not exceed the market value of the said immovable property or other assets, aree xcluded from the definition of „Public Deposit in terms of Non -Banking Financial Companies Acceptance of Public Deposits (Reserve



Bank) Directions, 1998. Secured debentures are debt instruments and are regulated by Securities & Exchange Board of India.

14. Whether NBFCs can accept deposits from NRIs?

Effective from April 24, 2004, NBFCs cannot accept deposits from NRIs except deposits by debit to NRO account of NRI provided suchamount does not represent inward remittance or transfer from NRE/FCNR (B) account. However, the existing NRI deposits can berenewed.

15. Is nomination facility available to the Depositors of NBFCs?

Yes, nomination facility is available to the depositors of NBFCs. The Rules for nomination facility are provided for in section 45QB of theReserve Bank of India Act, 1934. Non-Banking Financial Companies have been advised to adopt the Banking Companies (Nomination)Rules, 1985 made under Section 45ZA of the Banking Regulation Act, 1949. Accordingly, depositor/s of NBFCs are permitted to nominateone person to whom the NBFC can return the deposit in the event of the death of the depositor/s. NBFCs are advised to acceptnominations made by the depositors in the form similar to one specified under the said rules, viz Form DA 1 for the purpose of nomination,and Form DA2 and DA3 for cancellation of nomination and change of nomination respectively.

16. What else should a depositor bear in mind while depositing money with NBFCs?

hile making deposits with an NBFC, the following aspects should be borne in mind:

i. Public deposits are unsecured.ii. A proper deposit receipt is issued, giving details such as the name of the depositor/s, the date of deposit, the amount in words

and figures, rate of interest payable and the date of repayment of matured deposit along with the maturity amount. Depositor/sshould insist on the above and also ensure that the receipt is duly signed and stamped by an officer authorised by the companyon its behalf.

iii. In the case of brokers/agents etc collecting public deposits on behalf of NBFCs, the depositors should satisfy themselves thatthe brokers/agents are duly authorized by the NBFC.

iv. The Reserve Bank of India does not accept any responsibility or guarantee about the present position as to the financialsoundness of the company or for the correctness of any of the statements or representations made or opinions expressed by thecompany and for repayment of deposits/discharge of the liabilities by the company.

v. Deposit Insurance facility is not available to the depositors of NBFCs.

17. It is said that rating of NBFCs is necessary before it accepts deposit? Is it true? Who rates them?

An unrated NBFC, except certain Asset Finance companies (AFC), cannot accept public deposits. An exception is made in case of unrated AFC companies with CRAR of 15% which can accept public deposit without having a credit rating up to a certain ceiling depending upon itsNet Owned Funds (refer answer to Q 10 ). NBFC may get itself rated by any of the five rating agencies namely, CRISIL, CARE, ICRA and

FITCH, Ratings India Pvt. Ltd and Brickwork Ratings India Pvt. Ltd

18. What are the symbols of minimum investment grade rating of different companies?

The symbols of minimum investment grade rating of the Credit rating agencies are:

Name of rating agencies Nomenclature of minimum investmentgrade credit rating (MIGR)

CRISIL FA- (FA MINUS)

ICRA MA- (MA MINUS)

CARE CARE BBB (FD)

FITCH Ratings India Pvt. Ltd. tA-(ind)(FD)

Brickwork Ratings India Pvt. Ltd. BWR FA (FD)

It may be added that A- is not equivalent to A, AA- is not equivalent to AA and AAA- is not equivalent to AAA.

19. Can an NBFC which is yet to be rated accept public deposit?

No, an NBFC cannot accept deposit without rating (except an Asset Finance Company complying with prudential norms and having CRARof 15%, as explained above in answer to Q 10).

http://www.rbi.org.in/scripts/FAQView.aspx?Id=71#Q10






20. When a company’s rating is downgraded, does it have to bring down its level of public deposits immediately or over a periodof time?

If rating of an NBFC is downgraded to below minimum investment grade rating, it has to stop accepting public deposits, report the positionwithin fifteen working days to the RBI and bring within three years from the date of such downgrading of credit rating, the amount of publicdeposit to nil or to the appropriate extent permissible under paragraph 4(4) of Non-Banking Financial Companies Acceptance of PublicDeposits (Reserve Bank) Directions, 1998.

21. In case an NBFC defaults in repayment of deposit what course of action can be taken by depositors?

If an NBFC defaults in repayment of deposit, the depositor can approach Company Law Board or Consumer Forum or file a civil suit in acourt of law to recover the deposits.

22. What is the role of Company Law Board in protecting the interest of depositors? How can one approach it?

hen an NBFC fails to repay any deposit or part thereof in accordance with the terms and conditions of such deposit, the Company LaBoard (CLB) either on its own motion or on an application from the depositor, directs by order the Non-Banking Financial Company to makerepayment of such deposit or part thereof forthwith or within such time and subject to such conditions as may be specified in the order.

After making the payment, the company will need to file the compliance with the local office of the Reserve Bank of India.

As explained above, the depositor can approach CLB by mailing an application in prescribed form to the appropriate bench of the CompanyLaw Board according to its territorial jurisdiction along with the prescribed fee.

23. Can you give the addresses of the various benches of the Company Law Board (CLB) indicating their respective jurisdiction?

The details of addresses and territorial jurisdiction of the bench officers of CLB are as under:

ADDRESSES OF REGIONAL COMPANY LAW BOARD

S.No. Region Jurisdiction Telephone No. Fax No.

1. Company LawBoardPrincipal BenchParyavaranBhawanB-Block, 3rdFloorC.G.O. ComplexLodhi Road,New Delhi – 110003

All States & UnionTerritories

011 – 24366126011- 24363451011 – 24366125011 - 24366123

011 – 24366126

2. Company LawBoardNew DelhiBenchParyavaranBhawanB-Block, 3rdFloorC.G.O. ComplexLodhi Road,New Delhi – 110003

States of Delhi,Haryana, HimachalPradesh, Jammu &Kashmir, Punjab,Rajasthan, UttarPradesh, Uttaranchaland Union Territories ofChandigarh.

011 – 24363671011- 24363451011 – 24366125011 - 24366123

011 – 24366126

3. Company LawBoardKolkata Bench9 Old PostOffice Street6th Floor,Kolkata – 700001

States of ArunachalPradesh, Assam, Bihar,Manipur, Meghalaya,Nagaland, Orissa,Sikkim, Tripura, WestBengal, Jharkhand andUnion Territories of

Andaman and NicobarIsland and Mizoram.

033 – 22486330 033 – 22621760

4. Company LawBoardMumbai Bench

States of Goa, Gujarat,Madhya Pradesh,Maharashtra,

022 – 22619636/022 – 22611456

022 – 22619636



N.T.C. House,2nd Floor,15 NarottamMorarjee Marg,Ballard Estate,Mumbai – 400038

Chhattisgarh and (UnionTerritories of Dadra andNagar Haveli andDaman and Diu)

5. Company LawBoardChennai BenchCorporateBhawan (UTIBuilding),3rd Floor, No. 29Rajaji Salai,Chennai – 600001.

States of AndhraPradesh, Karnataka,Kerala, Tamil Nadu andUnion Territories ofPondicherry andLakshadweep Island.

044 – 25262793 044 – 25262794

24. We hear that in a number of cases Official Liquidators have been appointed on the defaulting NBFCs. What is the procedureadopted by the Official Liquidator?

An Official Liquidator is appointed by the court after giving the company reasonable opportunity of being heard in a winding up petition. Theliquidator performs the duties of winding up of the company and such duties in reference thereto as the court may impose. Where the courthas appointed an official liquidator or provisional liquidator, he becomes custodian of the property of the company and runs day-to-day

affairs of the company. He has to draw up a statement of affairs of the company in prescribed form containing particulars of assets of thecompany, its debts and liabilities, names/residences/occupations of its creditors, the debts due to the company and such othe r informationas may be prescribed. The scheme is drawn up by the liquidator and same is put up to the court for approval. The liquidator realizes theassets of the company and arranges to repay the creditors according to the scheme approved by the court. The liquidator generally insertsadvertisement in the newspaper inviting claims from depositors/investors in compliance with court orders. Therefore, theinvestors/depositors should file the claims within due time as per such notices of the liquidator. The Reserve Bank also provides assistanceo the depositors in furnishing addresses of the official liquidator.

25. The Consumer Court plays useful role in attending to depositors problems. Can one approach Consumer Forum, Civil Court,CLB simultaneously?

Yes, a depositor can approach any or all of the redressal authorities i.e consumer forum, court or CLB.

26. Is there an Ombudsman for hearing complaints against NBFCs?

No, there is no Ombudsman for hearing complaints against NBFCs. However, in respect of credit card operations of an NBFC, if acomplainant does not get satisfactory response from the NBFC within a maximum period of thirty (30) days from the date of lodging thecomplaint, the customer will have the option to approach the Office of the concerned Banking Ombudsman for redressal of his grievance/s.

All NBFCs have in place a Grievance Redressal Officer, whose name and contact details have to be mandatorily displayed in the premisesof the NBFCs. The grievance can be taken up with the Grievance Redressal Officer. In case the complainant is not satisfied with thesettlement of the complaint by the Grievance Redressal Officer of the NBFC, he/she may approach the nearest office of the Reserve Bankof India with the complaint. The details of the Office of the Reserve Bank has also to be mandatorily displayed in the premises of the NBFC.

27. What are various prudential regulations applicable to NBFCs?

The Bank has issued detailed directions on prudential norms, vide Non-Banking Financial Companies Prudential Norms (Reserve Bank)Directions, 1998. The directions interalia, prescribe guidelines on income recognition, asset classification and provisioning requirementsapplicable to NBFCs, exposure norms, constitution of audit committee, disclosures in the balance sheet, requirement of capital adequacy,restrictions on investments in land and building and unquoted shares, loan to value (LTV) ratio for NBFCs predominantly engaged inbusiness of lending against gold jewellery, besides others. Deposit accepting NBFCs have also to comply with the statutory liquidity

requirements. Details of the prudential regulations applicable to NBFC holding deposits and those not holding deposits is available in theDNBS section of master Circulars in the RBI website www.rbi.org.in → sitemap → Master Circulars.

28. Please explainthe terms ‘owned fund’ and ‘net owned fund’ in relation to NBFCs?

„Owned Fund means aggregate of the paid -up equity capital , preference shares which are compulsorily convertible into equity, freereserves , balance in share premium account and capital reserves representing surplus arising out of sale proceeds of asset, excludingreserves created by revaluation of asset, after deducting therefrom accumulated balance of loss, deferred revenue expenditure and otherintangible assets.'Net Owned Fund' is the amount as arrived at above, minus the amount of investments of such company in shares of itssubsidiaries, companies in the same group and all other NBFCs and the book value of debentures, bonds, outstanding loans and advancesincluding hire purchase and lease finance made to and deposits with subsidiaries and companies in the same group, to the extent it






exceeds 10% of the owned fund.

29. What are the responsibilities of the NBFCs accepting/holding public deposits with regard to submission of Returns and otherinformation to RBI?

The NBFCs accepting public deposits should furnish to RBI

i. Audited balance sheet of each financial year and an audited profit and loss account in respect of that year as passed in theannual general meeting together with a copy of the report of the Board of Directors and a copy of the report and the notes onaccounts furnished by its Auditors;

ii. Statutory Quarterly Return on deposits - NBS 1;iii. Certificate from the Auditors that the company is in a position to repay the deposits as and when the claims arise;iv. Quarterly Return on prudentia l norms-NBS 2;v. Quarterly Return on liquid assets-NBS 3;vi. Annual return of critical parameters by a rejected company holding public deposits – NBS4vii. Half-yearly ALM Returns by companies having public deposits of Rs. 20 crore and above or asset size of Rs. 100 crore and

above irrespective of the size of deposits holdingviii. Monthly return on exposure to capital market by deposit taking NBFC with total assets of Rs 100 crore and above – NBS6; andix. A copy of the Credit Rating obtained once a year

30. What are the documents or the compliance required to be submitted to the Reserve Bank of India by the NBFCs notaccepting/holding public deposits?

The NBFCs having assets of Rs. 100 crore and above but not accepting public deposits are required to submit:

(i) Quarterly statement of capital funds, risk weighted assets, risk asset ratio etc., for the company – NBS 7

(ii) Monthly Return on Important Financial Parameters of the company

(iii) Asset- Liability Management (ALM) returns:

(iv) Statement of short term dynamic liquidity in format ALM [NBS-ALM1] -Monthly,

(v) Statement of structural liquidity in format ALM [NBS-ALM2] Half Yearly

(vi) Statement of Interest Rate Sensitivity in format ALM -[NBS-ALM3], Half yearly

B. The non deposit taking NBFCs having assets of more than Rs.50 crore and above but less than Rs 100 crore are required to submitQuarterly return on important financial parameters of the company. Basic information like name of the company, address, NOF, profit / lossduring the last three years has to be submitted quarterly by non-deposit taking NBFCs with asset size between Rs 50 crore and Rs 100crore

All companies not accepting public deposits have to pass a board resolution to the effect that they have neither accepted public deposit norwould accept any public deposit during the year.

However, all the NBFCs (other than those exempted) are required to be registered with RBI and also make sure that they continue to beeligible to retain the Registration. Further, all NBFCs (including non-deposit taking) should submit a certificate from their Statutory Auditorsevery year to the effect that they continue to undertake the business of NBFI requiring holding of CoR under Section 45-IA of the RBI Act,1934

NBFCs are also required to furnish the information in respect of any change in the composition of its Board of Directors, address of thecompany and its Directors and the name/s and official designations of its principal officers and the name and office address of its Auditors.

ith effect from April 1, 2007, non-deposit taking NBFCs with assets of Rs 100 crore and above were advised to maintain minimum CRARof 10% and also comply with single/group exposure norms. As on date, such NBFCs are required to maintain a minimum CRAR of 15%.

31. The NBFCs have been made liable to pay interest on the overdue matured deposits if the company has not been able to repayhe matured public deposits on receipt of a claim from the depositor. Please elaborate the provisions.

As per Reserve Bank s Directions, overdue interest is payable to the deposi tors in case the company has delayed the repayment ofmatured deposits, and such interest is payable from the date of receipt of such c laim by the company or the date of maturity of the depositwhichever is later, till the date of actual payment. If the depositor has lodged his claim after the date of maturity, the company would beliable to pay interest for the period from the date of claim till the date of repayment. For the period between the date of maturity and thedate of claim it is the discretion of the company to pay interest.



32. Can a company pre-pay its public deposits?

An NBFC accepts deposits under a mutual contract with its depositors. In case a depositor requests for pre-mature payment, ReserveBank of India has prescribed Regulations for such an eventuality in the Non-Banking Financial Companies Acceptance of Public Deposits(Reserve Bank) Directions, 1998 wherein it is specified that NBFCs cannot grant any loan against a public deposit or make prematurerepayment of a public deposit within a period of three months (lock-in period) from the date of its acceptance. However, in the event ofdeath of a depositor, the company may, even within the lock-in period, repay the deposit at the request of the joint holders with survivorclause / nominee / legal heir only against submission of relevant proof, to the satisfaction of the company

An NBFC, (which is not a problem company) subject to above provisions, may permit after the lock – in period, premature repayment of apublic deposit at its sole discretion, at the rate of interest prescribed by the Bank

A problem NBFC is prohibited from making premature repayment of any deposits or granting any loan against public deposit/deposits, ashe case may be. The prohibition shallnot, however, apply in the case of death of depositor or repayment of tiny deposits i.e. up to Rs.

10000/- subject to lock in period of 3 months in the latter case.

33. What is the liquid assets requirement for the deposit taking companies? Where are these assets kept? Do depositors haveany claims on them?

In terms of Section 45-IB of the RBI Act, 1934, the minimum level of liquid assets to be maintained by NBFCs is 15 per cent of publicdeposits outstanding as on the last working day of the second preceding quarter. Of the 15%, NBFCs are required to invest not less thanen percent in approved securities and the remaining 5% can be in unencumbered term deposits with any scheduled commercial bank.

Thus, the liquid assets may consist of Government securities, Government guaranteed bonds and term deposits with any scheduled

commercial bank.

The investment in Government securities should be in dematerialised form which can be maintained in Constituents Subsidiary GeneralLedger (CSGL) Account with a scheduled commercial bank (SCB) / Stock Holding Corporation of India Limited (SHICL). In case ofGovernment guaranteed bonds the same may be kept in dematerialised form with SCB/SHCIL or in a dematerialised account withdepositories [National Securities Depository Ltd. (NSDL)/Central Depository Services (India) Ltd. (CDSL)] through a depository participantregistered with Securities & Exchange Board of India (SEBI). However in case there are Government bonds which are in physical form thesame may be kept in safe custody of SCB/SHCIL.

NBFCs have been directed to maintain the mandated liquid asset securities in a dematerialised form with the entities stated above at aplace where the registered office of the company is situated. However, if an NBFC intends to entrust the securities at a place other than theplace at which its registered office is located, it may do so after obtaining the permission of RBI in writing. It may be noted that liquid assetsin approved securities will have to be maintained in dematerialised form only.

The liquid assets maintained as above are to be utilised for payment of claims of depositors. However, deposits being unsecured in nature,depositors do not have direct claim on liquid assets.

34. Please tell us something about the companies which are NBFCs, but are exempted from registration?

Housing Finance Companies, Merchant Banking Companies, Stock Exchanges, Companies engaged in the business of stock-broking/sub-broking, Venture Capital Fund Companies, Nidhi Companies, Insurance companies and Chit Fund Companies are NBFCs but they havebeen exempted from the requirement of registration under Section 45-IA of the RBI Act, 1934 subject to certain conditions.

Housing Finance Companies are regulated by National Housing Bank, Merchant Banker/Venture Capital Fund Company/stock-exchanges/stock brokers/sub-brokers are regulated by Securities and Exchange Board of India, and Insurance companies are regulated byInsurance Regulatory and Development Authority. Similarly, Chit Fund Companies are regulated by the respective State Governments andNidhi Companies are regulated by Ministry of Corporate Affairs, Government of India.

It may also be mentioned that Mortgage Guarantee Companies have been notified as Non-Banking Financial Companies under Section 45I(f)(iii) of the RBI Act, 1934.

35. There are some entities (not companies) which carry on activities like that of NBFCs. Are they allowed to take deposits? Whoregulates them?

Any person who is an individual or a firm or unincorporated association of individuals cannot accept deposits except by way of loan fromrelatives, if his/its business wholly or partly includes loan, investment, hire-purchase or leasing activity or principal business is that ofreceiving of deposits under any scheme or arrangement or in any manner or lending in any manner.

36. What is a Residuary Non-Banking Company (RNBC)? In what way it is different from other NBFCs?

Residuary Non-Banking Company is a class of NBFC which is a company and has as its principal business the receiving of deposits, under



any scheme or arrangement or in any other manner and not being Investment, Asset Financing, Loan Company. These companies arerequired to maintain investments as per directions of RBI, in addition to liquid assets. The functioning of these companies is different fromhose of NBFCs in terms of method of mobilization of deposits and requirement of deployment of depositors' funds as per Directions.

Besides, Prudential Norms Directions are applicable to these companies also.

37. We understand that there is no ceiling on raising of deposits by RNBCs, then how safe is deposit with them?

It is true that there is no ceiling on raising of deposits by RNBCs but every RNBC has to ensure that the amounts deposited andinvestments made by the company are not less than the aggregate amount of liabilities to the depositors

To secure the interest of depositor, such companies are required to invest in a portfolio comprising of highly liquid and secure instrumentsviz. Central/State Government securities, fixed deposits with scheduled commercial banks (SCB), Certificate of deposits of SCB/FIs, unitsof Mutual Funds, etc. to the extent of 100 per cent of their deposit liability.

38. Can RNBC forfeit deposit if deposit installments are not paid regularly or discontinued?

No Residuary Non-Banking Company shall forfeit any amount deposited by the depositor, or any interest, premium, bonus or otheradvantage accrued thereon.

39. Please tell us something on rate of interest payable by RNBCs on deposits and maturity period of deposits

The amount payable by way of interest, premium, bonus or other advantage, by whatever name called by a RNBC in respect of depositsreceived shall not be less than the amount calculated at the rate of 5% (to be compounded annually) on the amount deposited in lump sumor at monthly or longer intervals; and at the rate of 3.5% (to be compounded annually) on the amount deposited under daily depositscheme. Further, a RNBC can accept deposits for a minimum period of 12 months and maximum period of 84 months from the date ofreceipt of such deposit. They cannot accept deposits repayable on demand.

40. There are some companies like Multi-Level Marketing companies, Chit funds etc. Do they come under the purview of RBI?

No, Multi-Level Marketing companies, Direct Selling Companies, Online Selling Companies don t fall under the purview of RBI. Activities ofhese companies fall under the regulatory/administrative domain of respective state government. A list of such companies and their

regulators are as follows:

Category of Companies Regulator

Chit Funds Respective State Governments

Insurance companies IRDA

Housing Finance Companies NHB

Venture Capital Fund / SEBI

Merchant Banking companies SEBI

Stock broking companies SEBI

Nidhi Companies Ministry of corporate affairs,Government of India

41. What are Unincorporated Bodies (UIBs)? Has RBI any role to play in curbing illegal deposit acceptance activities of UIBs?

Unincorporated bodies (UIBs) include an individual, a firm or an unincorporated association of individuals. In terms of provision of s ection45S of RBI act, these entities are prohibited from accepting any deposit. The state government has to play a proactive role in arresting theillegal activities of such entities to protect interests of depositors/investors.

UIBs do not come under the regulatory domain of RBI. Whenever RBI receives any complaints against UIBs, it immediately forwards thesame to the state government police agencies (Economic Offences Wing (EOW)). The complainants are advised to lodge the complaintsdirectly with the state government police authorities (EOW) so that appropriate action against the culprits is taken immediately and theprocess is hastened.

RBI on its part has taken various steps to curb activities of UIBs which includes spreading awareness through advertisements in leadingnewspapers to sensitise public, organize various investors awareness programmes in various districts of the country, keeps close liaisonwith the law enforcing agencies (Economic Offences Wing).



42. Companies registered with MCA but not registered with RBI as NBFCs also sometimes default in repayment ofdeposit/amounts invested with them? What is the recourse available to the investors in such an event? Does RBI have any role toplay in such cases?

Companies registered with MCA but not required to be registered with RBI as NBFC are not under the regulatory domain of RBI. WheneverRBI receives any such complaints about the companies registered with MCA but not registered with RBI as NBFCs, it forwards thecomplaints to the Registrar of Companies (ROC) of the respective state for any action. The complainants are advised that the complaintsrelating to irregularities of such companies should be promptly lodged with ROC concerned for initiating corrective action. However, in caseit comes to the knowledge of RBI those companies were required to be registered with the RBI, but have not done so and have accepteddeposits as defined under RBI Act, such action as is deemed necessary under the provisions of the RBI Act will be taken.

ifferent types of NBFCs:

There are different categories of NBFC's operating in India under the supervisorycontrol of RBI.

They are:

1. Non-Banking Financial Companies (NBFCs)2. Residuary Non-banking Finance companies(RNBCs).3. Miscellaneous Non-Banking Finance Companies (MNBCs) and

Residuary Non-Banking Company is a class of NBFC, which is a company and has asits principal business the receiving of deposits, under any scheme or arrangementor in any other manner and not being Investment, Leasing, Hire-Purchase, LoanCompany. These companies are required to maintain investments as per directionsof RBI, in addition to liquid assets. The functioning of these companies is differentfrom those of NBFCs in terms of method of mobilization of deposits andrequirement of deployment of depositors' funds. Peerless Financial Company is the

example of RNBCs.

Miscellaneous Non-Banking Financial Companies are another type of NBFCs andMNBC means a company carrying on all or any of the types of business ascollecting, managing, conducting or supervising as a promoter or in any othercapacity, conducting any other form of chit or kuri which is different from the typeof business mentioned above and any other business similar to the business asreferred above.

Type of Services provided by NBFCs:

NBFCs provide range of financial services to their clients. Types of services undernon-banking finance services include the following:

1. Hire Purchase Services2. Leasing Services3. Housing Finance Services



4. Asset Management Services5. Venture Capital Services6. Mutual Benefit Finance Services (Nidhi) banks.

The above type of companies may be further classified into those acceptingdeposits or those not accepting deposits.

Now we take a look at each type of service that an NBFC could undertake.

Hire Purchase Services

Hire purchase the legal term for a conditional sale contract with an intention tofinance consumers towards vehicles, white goods etc. If a buyer cannot afford topay the price as a lump sum but can afford to pay a percentage as a deposit, thecontract allows the buyer to hire the goods for a monthly rent. If the buyer defaultsin paying the installments, the owner can repossess the goods. HP is a differentform of credit system among other unsecured consumer credit systems andbenefits. Hero Honda Motor Finance Co., Bajaj Auto Finance Company is some ofthe HP financing companies.

Leasing Services

A lease or tenancy is a contract that transfers the right to possess specific property.Leasing service includes the leasing of assets to other companies either onoperating lease or finance lease. An NBFC may obtain license to commence leasingservices subject to , they shall not hold, deal or trade in real estate business andshall not fix the period of lease for less than 3 years in the case of any finance leaseagreement except in case of computers and other IT accessories. First CenturyLeasing Company Ltd., Sundaram Finance Ltd. is some of the Leasing companies inIndia.

Housing Finance Services

Housing Finance Services means financial services related to development andconstruction of residential and commercial properties. An Housing Finance Companyapproved by the National Housing Bank may undertake the services /activities suchas Providing long term finance for the purpose of constructing, purchasing orrenovating any property, Managing public or private sector projects in the housingand urban development sector and Financing against existing property by way ofmortgage. ICICI Home Finance Ltd., LIC Housing Finance Co. Ltd., HDFC is some ofthe housing finance companies in our country.



Asset Management Company

Asset Management Company is managing and investing the pooled funds of retailinvestors in securities in line with the stated investment objectives and providesmore diversification, liquidity, and professional management service to theindividual investors. Mutual Funds are comes under this category. Most of thefinancial institutions having their subsidiaries as Asset Management Company likeSBI, BOB, UTI and many others.

Venture Capital Companies

Venture capital Finance is a unique form of financing activity that is undertaken onthe belief of high-risk-high-return. Venture capitalists invest in those risky projectsor companies (ventures) that have success potential and could promise sufficientreturn to justify such gamble. Venture capitalist not only provides finance but alsooften provides managerial or technical expertise to venture projects. In India,venture capital concentrate on seed capital finance for high technology and forresearch & development. ICICI ventures and Gujarat Venture are one of the firstventure capital organizations in India and SIDBI, IDBI and others also promotingventure capital finance activities.

Mutual Benefit Finance Companies (MBFC's),

A mutual fund is a financial intermediary that allows a group of investors to pooltheir money together with a predetermined investment objective. The mutual fundwill have a fund manager who is responsible for investing the pooled money intospecific securities/bonds. Mutual funds are one of the best investments ever createdbecause they are very cost efficient and very easy to invest in. By pooling moneytogether in a mutual fund, investors can purchase stocks or bonds with much lowertrading costs than if they tried to do it on their own. But the biggest advantage tomutual funds is diversification.

There are two main types of such funds, open-ended fund and close-ended mutualfunds. In case of open-ended fund, the fund manager continuously allows investorsto join or leave the fund. The fund is set up as a trust, with an independent trustee,who keeps custody over the assets of the trust. Each share of the trust is called aUnit and the fund itself is called a Mutual Fund. The portfolio of investments of theMutual Fund is normally evaluated daily by the fund manager on the basis ofprevailing market prices of the securities in the portfolio and this will be divided bythe number of units issued to determine the Net Asset Value (NAV) per unit. Aninvestor can join or leave the fund on the basis of the NAV per unit.



In contrast, a close-end fund is similar to a listed company with respect to its sharecapital. These shares are not redeemable and are traded in the stock exchange likeany other listed securities. Value of units of close-end funds is determined bymarket forces and is available at 20-30% discount to their NAV.

Financial Sector Reforms & Liberalization measures for NBFCs

During the period from 1992-93 to 1995-96 Indian Government took many steps toreform the financial sector like liberalized bank norms, higher ceiling on term loans,allowed to set their own interest rates, freed to fix their own foreign exchange openposition subject of RBI approval and guidelines issued to ensure qualitativeimprovement in their customer service.

Foreign equity investments in NBFCs are permitted in more than17 categories ofNBFC activities approved for foreign equity investments such as merchant banking,stock broking, venture capital, housing finance, forex broking, leasing and finance,financial consultancy etc. Guidelines for foreign investment in NBFC sector havebeen amended so as to provide for a minimum capitalization norm for the activities,which are not fund based and only advisory, or consultancy in nature, irrespectiveof the foreign equity participation level.

The objectives behind the reforms in the financial sector are to improve theefficiency and competitiveness in the systems.

Recent trends in Non-Banking Financial Companies Sector

NBFCs initially cater to the needs of individual and small savings investors and laterdeveloped into financial institutions, providing services similar to those of banks.NBFCs have many tailor made services for their clients with lesser degree ofregulation. They have offered high rate of interest to their investors and atrractedmany small size investors. In 1998, Reserve Bank of India implementedunprecedented regulatory measures to safeguard the public deposits.

The Bank has issued detailed directions on prudential norms, vide Non-BankingFinancial Companies Prudential Norms (Reserve Bank) Directions, 1998. Thedirections interalia, prescribe guidelines on income recognition, asset classificationand provisioning requirements applicable to NBFCs, exposure norms, constitution ofaudit committee, disclosures in the balance sheet, requirement of capital adequacy,restrictions on investments in land and building and unquoted shares.

The RBI has issued guidelines for entry of NBFCs into insurance sector in June 2000. Accordingly no NBFC registered with RBI having owned fund of Rs.2 Crore as per



the last audited Balance Sheet would be permitted to undertake insurance businessas agent of insurance companies on fee basis, without any risk participation.

The focus of regulatory initiatives in respect of financial institutions (FIs) during2004-05 was to strengthen the prudential guidelines relating to asset classification,provisioning, exposure to a single/group borrower and governance norms. Businessoperations of FIs expanded during 2004-05. Their financial performance alsoimproved, resulting from an increase in net interest income. Significantimprovement was also observed in the asset quality of FIs, in general. The capitaladequacy ratio of FIs continued to remain at a high level, notwithstanding somedecline during the year.

Regulatory initiatives in respect of NBFCs during the year related to issuance ofguidelines on credit/debit cards, reporting arrangements for large sized NBFCs notaccepting/holding public deposits, norms for premature withdrawal of deposits,cover for public deposits and know your customer (KYC) guidelines. Profitability ofNBFCs improved in 2003-04 and 2004-05 mainly on account of containment ofexpenditure. While gross NPAs of NBFCs, as a group, declined during 2003-04 and2004-05, net NPAs after declining marginally during 2003-04, increasedsignificantly during 2004-05.

op NBFC Companies in India

Top five NBFCs in India:

• Housing Development Finance Corporation Limited

• Power Finance Corporation Limited

• Rural Electrification Corporation Limited

• National Bank of Agricultural and Rural Development

• Infrastructure Development Finance Company Limited

Some of the details regarding these top five NBFCs in India are given below:

Housing Development Finance Corporation Limited:

Housing Development Finance Corporation Limited is shortly called as HDFC, which was incorporated in the year 1997 with the o bjective ofoffering long-term finance to households to meet their housing requirements. HDFC is basically engaged in the promotion of housingownership by offering long-term finance to households. Some of the products offered by them are land purchase loans, home equity loans,short-term bridge loans, home extension loans, home improvement loans and home loans.

Power Finance Corporation Limited:

Power Finance Corporation Limited came into existence in the year 1986 with the objective of promoting the power sector in th e nation. Thecompany is engaged in offering finance for implementation of power projects and for development of new power pl ants. The company offersboth non-financial and financial support to power equipment manufacturing firms, municipal bodies, co-operative societies, private sectorpower companies, joint sector power companies, central power companies and state electricity departments.

Rural Electrification Corporation Limited:

Rural Electrification Corporation Limited shortly called as REC came into existence in the year 1969 for the purpose of promotion of ruralelectrification projects in the country. The company became an NBFC in the year 1998 and it plays a crucial role in expansion, modernizationand creation of power infrastructure in all segments of power sector in the nation covering distribution, transmission and generation as well.It is also offering financial support to emerging areas like non-conventional energy and decentralized distributed generation.



National Bank of Agricultural and Rural Development:

Shortly called as NABARD, this NBFC came into existence in the year 1982 for enabling flow of credit for promotion of rural non-farm andagricultural sectors. It acts as an apex institution in rural development and agricultural credit. The functions of NABARD has been classifiedinto four categories namely supervision, promotion & development, financial services and credit planning.

Infrastructure Development Finance Company Limited:

Infrastructure Development Finance Company Limited shortly called as IDFC came into existence in the year 1997 in the Indian state of TamilNadu. In the year 2005, it became a public entity and it is engaged in offering project finance, asset management, investment banking,principal investment & treasury and project finance services. The business activities of this NBFC can be divided into two types namely fund-based and non-fund based businesses.

There are several other NBFCs in India like Shriram Transport Finance Company Limited, IFCI Limited, etc…

What is a non-banking financial company?

The financial sector in any economy consists of several intermediaries. Apart from banking entities, there are investment intermediaries (such as

mutual funds, hedge funds, pension funds, and so on), risk transfer entities (such as insurance companies), information and analysis providers (such

as rating agencies, financial advisers, etc), investment banks, portfolio managers and so on.

All such entities t hat offer fi nancial services other than banking, may be broadly called non-banking financial institutions. What is banking? Banking is

commonly understood to mean taking of deposits withdrawable on demand or notice - that is, banks can hold people's deposits and promise to paythem on demand. There are variety of other entities that may accept deposits - hence, acceptance of deposits is not the essence of banking.

In India, the term "non-banking financial companies" acquires a new meaning, and a huge significance. The meaning of the term is such entities which

are not banks, and yet carry lending activities almost at par with banks. They may also accept deposits - however, these deposits are term deposits

and not call deposits.

The significance of non-banking financial companies in India lies in the massive capabilities of NBFCs - short of acceptance of call deposits and

remittance function, NBFCs can virtually do everything that a bank can. Compared to this disability, the ease of entry and lightness of regulation

applicable to NBFCs makes it a tremendous focus of interest, particularly for foreign investors wanting to enter India's financial sector.

For instance, it is possible to hold 100% foreign ownership of NBFCs, while in case of banks, there are serious caps.

It is possible to either start an NBFC or buy one of the 17000-odd companies many of which are formed for sale. On the other hand, getting a banking

license requires a real penance.

There are numerous articles and presentations on this site as well as Staff Publications Page pertaining to NBFCs.

Our dedicated pages

Overview of the NBFC sector in India

Articles on NBFCs

Infrastructure Financing

Housing finance

Affordable housing finance

Core investment companies

SAMPADA- Our newsletter on NBFCs

Other Resources

Presentation on New Regulatory Regime for NBFCs, by Vinod Kothari, 13th December 2012- the presentation provides a comprehensive view of the

revised regulations applicable to NBFCs

Vinod Kothari's presentation on Regulatory Framework for NBFCs in India and abroad

Overview chart on NBFC Sector in India, by Nidhi Ladha, 03rd July 2012

Primer on NBFCs by Vinod Kothari : written in FAQ form, this write tries to answer several questions that querists commonly have regarding NBFCs.

Overview of the NBFC sector in India, by Nidhi Bothra and Kamil Sayeed:This 2011 write up traces the progress and performance of NBFCs in India

http://www.india-financing.com/index.php/what-is-a-non-banking-financial-company.html?layout=edit&id=121



http://www.india-financing.com/overview-of-the-indian-nbfc-sector.html


http://www.india-financing.com/staff-publications-nbfc.html


http://www.india-financing.com/infrastructure-financing.html


http://www.india-financing.com/housing-finance.html


http://vinodkothari.com/affordable_housing.htm


http://www.india-financing.com/core-investment-companies.html


http://www.india-financing.com/sampada-our-news-and-viewsletter-on-non-banking-financial-services.html


http://www.india-financing.com/New_NBFC_Regulatory_Regime.pdf

http://www.india-financing.com/Non-Banking%20Financial%20Companies-Regulatory%20framework%20in%20India%20and%20abroad.pdf


http://www.india-financing.com/Non_banking_finance_sector%20in_India.pdf


http://www.india-financing.com/NBFCs%20a%20primer.pdf

http://www.india-financing.com/index.php/what-is-a-non-banking-financial-company.html?id=106

http://www.india-financing.com/index.php/what-is-a-non-banking-financial-company.html?id=106

http://www.india-financing.com/NBFCs%20a%20primer.pdf



http://www.india-financing.com/New_NBFC_Regulatory_Regime.pdf











Core investment companies - Vinod Kothari's article appeared in Chartered Secretary, Feb 2011 issue. The article discusses the exemption from

registration requirements given to core investment companies.

Definition of NBFCs - concept of Principality of business: This article by Payel Jain, then of Vinod Kothari & Company, discusses the definition of NBFCs

and RBI circular requiring a certain percentage of assets and income, and was published in Chartered Secretary, August 2010.

http://www.india-financing.com/what-is-a-non-banking-financial-company.html

NBFCs default to peak by March 2015: India Ratings

OUR BUREAU COMMENT · PRINT · T+

inShare 1

Ads by Google Upload Your CV For Jobs - Worlds Best Job Portal Now in India Get Employed In Secs. Upload Now.

www.careerbuilder.co.in MUMBAI, FEB 10:Despite the ease in asset quality pressures by second half of fiscal year 2015 for major Indian non-bank finance companies (NBFCs),delinquencies will peak only by March 2015, as per India Ratings & Research report.

NBFCs’ defences in the form of solid pre -provision operating profit (PPOP) and capital buffers provide a strong cushion againstIndia Ratings’ st ress tests on scenarios of spike in credit costs and elevated funding costs.

The agency expects the revival of certain infrastructure projects (cleared by the cabinet committee in recent months), pick-up inindustrial growth and corporate capex investments to benefit most of the commercial assets financed by the NBFCs, from 2QFY15onwards.

“This would ease the pressure on the cash flows of their borrowers through enhanced utilisation of their assets and containincremental delinquencies. New business growth, however, will likely remain subdued till 3QFY15, as it would require a longerperiod of sustained growth in the index of industrial production to entice operators to buy new vehicles,” the report said.

However, in a scenario of continued weak industrial growth and infrastructure projects remaining stalled, the asset quality pressurescould intensify and adversely impact the NBFCs with large unseasoned portfolios, in particular, it added.

Management focus is expected to increase on collection and recovery for the next two-three quarters as well as on controllingoperating costs, to contain the impact of lower loan growth. Nevertheless, rising credit costs and elevated funding costs wil l suppressprofitability, though it will still remain healthy, compared with commercial banks.

The rated major NBFCs’ steady operating performance (including stable asset quality) has facilitated their access to funding from banks, institutional investors and capital markets.

The ratings agency has kept the outlook NBFC sector stable in 2014.

(This article was published on February 10, 2014)

http://www.thehindubusinessline.com/economy/macro-economy/nbfcs-default-to-peak-by-march-2015-india-ratings/article5673788.ece

http://www.icsi.edu/cs/February%202011/Articles/New%20Regulatory%20Framework%20for%20Core%20Investment%20Companies%20by%20Vinod%20Kothari%203.pdf

http://www.icsi.edu/cs/August%202010/Articles/What%20Exactly%20is%20an%20NBFC%20%20by%20Payel%20Jain%205.pdf



http://www.thehindubusinessline.com/economy/macro-economy/nbfcs-default-to-peak-by-march-2015-india-ratings/article5673788.ece#comments


http://www.thehindubusinessline.com/economy/macro-economy/nbfcs-default-to-peak-by-march-2015-india-ratings/article5673788.ece?css=print






https://www.google.com/url?ct=abg&q=https://www.google.com/adsense/support/bin/request.py%3Fcontact%3Dabg_afc%26url%3Dhttp://www.thehindubusinessline.com/economy/macro-economy/nbfcs-default-to-peak-by-march-2015-india-ratings/article5673788.ece%26gl%3DIN%26hl%3Den%26client%3Dca-hindu_site_html%26hideleadgen%3D1%26ai0%3DCFVYPSD8XVOf4OceouASuj4KQB6DHkagFoPeOmcsBwI23ARABIL2DvxNQh4jAyvn_____AWDl0uSDqA6gAeGU3c8DyAEBqQJaVWDp-pdRPqgDAaoE4wFP0OWw3GStP75oHigHJiGpN-8zR3suHm0Y_APIIQ5RAe5XWrcRXVidenbI2bG8mmlUREcWldSapJvPFjuhQ4g3b6hPuhV-Lsr9T1DVQvTR90ZrN0evVCFUkV-MqWyTFsS9ePaxOuSIlOlfIW3Cps_0rWA5JzIAsWINSNkM5-egDT3ULZpasiciFDwnHvJuYYW8SF17-zTZA0bX3X5t0hnd3HpIed0_VdhDERvvlsmk9SPiYBYMAdapW7npC_l2akgD06e3WIgJ65O1igtl2O7z30877gZ8E_dFFQ6zUSKx27QeS4gGAYAH0JO0LA&usg=AFQjCNHJixJjAQaWSxc6JjUUS5i1yFGf7Q


http://www.googleadservices.com/pagead/aclk?sa=L&ai=CFVYPSD8XVOf4OceouASuj4KQB6DHkagFoPeOmcsBwI23ARABIL2DvxNQh4jAyvn_____AWDl0uSDqA6gAeGU3c8DyAEBqQJaVWDp-pdRPqgDAaoE4wFP0OWw3GStP75oHigHJiGpN-8zR3suHm0Y_APIIQ5RAe5XWrcRXVidenbI2bG8mmlUREcWldSapJvPFjuhQ4g3b6hPuhV-Lsr9T1DVQvTR90ZrN0evVCFUkV-MqWyTFsS9ePaxOuSIlOlfIW3Cps_0rWA5JzIAsWINSNkM5-egDT3ULZpasiciFDwnHvJuYYW8SF17-zTZA0bX3X5t0hnd3HpIed0_VdhDERvvlsmk9SPiYBYMAdapW7npC_l2akgD06e3WIgJ65O1igtl2O7z30877gZ8E_dFFQ6zUSKx27QeS4gGAYAH0JO0LA&num=1&cid=5GhDhWf_5L3eVLY_Wa4aA-lu&sig=AOD64_3uGdT2mq7Xwctk4JUPkT-kslv5hw&client=ca-hindu_site_html&adurl=https://www.careerbuilder.co.in/INTL/RegisterResume/RegisterResumePosting.aspx%3FsslRedirectCnt%3D1%26siteid%3DINT_INHGJOBS

















http://www.icsi.edu/cs/August%202010/Articles/What%20Exactly%20is%20an%20NBFC%20%20by%20Payel%20Jain%205.pdf

http://www.icsi.edu/cs/February%202011/Articles/New%20Regulatory%20Framework%20for%20Core%20Investment%20Companies%20by%20Vinod%20Kothari%203.pdf