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Under Reserve Bank of India Act, 1934 |
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Section 45-IA |
NBFC have to make application for registration with RBI and shall not commence or carry on business of a non-banking financial institution without obtaining registration from RBI and maintaining NOF.
NOF requirement for NBFC registered
Before 21/04/1999 = Rs.25 lacs
On or after 21/04/1999 = Rs.200 lacs
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One time |
All NBFC |
Section 45-IB |
Maintenance of percentage of assets
Invest and continue to invest 5% to 25% (specified by RBI) of deposits outstanding on the last working day of the second preceding quarter in unencumbered approved securities.
Notification No. DFC.121/ED(G)-98 dated 31.01.1998 and No. DFC(COC) NO.108-ED(JRP)-97 dated 30.04.1997
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Ongoing |
NBFC accepting / holding Public Deposit |
Section 45-IC |
Reserve Fund
Every NBFC shall create a reserve fund and transfer therein a sum not less than 20% of its net profit every year as disclosed in the profit and loss account and before any dividend is declared.
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Yearly |
All NBFC |
Section 45-M |
Duty of NBFC to furnish statements etc., required by Bank
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When asked for |
All NBFC |
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Under Non-Banking Financial Companies Acceptance of Public Deposit (Reserve Bank) Directions, 1998
Notification No.DFC.118/DG(SPT)-98 dated 31.01.1998
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Para 4 |
Minimum Credit Rating, Prohibition on acceptance of Deposit, repayable on demand, Period of Deposit (12 to 60 Months only), Ceiling on quantum of deposits (depends on status, rating, etc.), Status in case of Downgrading of credit rating, Regularisation of Public Deposit accepted earlier, Ceiling on the rate of interest (max 11%), Payment of Brokerage, etc.
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ongoing |
All NBFC
Not applicable subject to
1) not accepting Public Deposit
2) passed a resolution under para 9
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Para 4A, 4B |
Branches, agents, closures of branches
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ongoing |
All NBFC
Not applicable subject to
1) not accepting Public Deposit
2) passed a resolution under para 9
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Para 5 |
Information to be included in the Board’s report
e.g. total no. of accounts of public deposit, total amount due or unpaid, etc.
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ongoing |
All NBFC
Not applicable subject to
1) not accepting Public Deposit
2) passed a resolution under para 9
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Para 6 |
Safe custody of approved securities
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ongoing |
All NBFC
Not applicable subject to
1) not accepting Public Deposit
2) passed a resolution under para 9
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Para 7 |
Employee Security Deposit
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ongoing |
All NBFC
Not applicable subject to
1) not accepting Public Deposit
2) passed a resolution under para 9
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Para 8 |
Copies of balance sheet and accounts together with the Directors’ report, auditors’ report, notes on accounts, returns in Form – NBS 1 and intimation of any change in address, directors, principal officers, specimen signatures etc should be furnished to the Reserve Bank within 30 days of the occurrence of event.
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ongoing |
All NBFC
Not applicable subject to
1) not accepting Public Deposit
2) passed a resolution under para 9
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Para 9 |
Non-applicability of Direction to certain types of NBFC
a) Insurance company
b) Loan company, an investment company, a hire purchase company or equipment leasing company not holding or accepting public deposits and pass a resolution to the effect within 30 days of the commencement of the financial year
c) An investment company (investing only in group companies not less than 90% of its assets) and pass a resolution that has not accepted and would not accept Public Deposit and would not trade in such shares/ securities within 30 days of the commencement of the financial year.
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Every year within 30 days from the commencement of financial year |
All NBFC, which wants to claim exemptions
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Under Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998
Notification No.DFC.119/DG(SPT)-98 dated 31.01.1998
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Para 3, 4, 5, 6 |
Income recognition
Income from NPA shall be recognized only when actually realised. All unrealised income on NPA shall be reversed.
Income from investment
Dividend income on shares and units of Mutual Funds shall be taken on cash basis.
Income from Bonds and Debentures from Govt. Securities may be taken on accrual basis.
Income from securities (guaranteed by Central Govt. or State Govt.) may be taken on accrual basis.
Accounting Standards
Accounting standards shall be followed
Accounting of investment
Board of Directors shall frame investment policy
Other requirement regarding accounting of investment
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Ongoing |
All NBFC
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Para 6A |
Need for Policy on Demand / Call Loans
Policy for demand / call loan shall be framed
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Ongoing |
All NBFC giving loan etc.
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Para 7, 8, 9 |
Asset classification
Assets shall be classified as Standard, Sub-standard, Doubtful and Loss assets.
Provisioning requirements
Provision for assets (i.e. loans, advances or other credit facilities including bills purchased & discounted, Leased and hire purchased assets) shall be made
Disclosure in the Balance Sheet
Provision as in para 8 should be disclosed without netting off
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Ongoing
Ongoing
Yearly
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All NBFC
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Para 9A |
Constitution of Audit Committee
Company having assets of Rs.50 crore and above shall constitute an Audit Committee.
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Ongoing |
NBFC having assets of Rs.50 crore and above
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Para 9B, 9BB |
Accounting Year
Every NBFC shall prepare its B/S and P/L as on 31st March
Schedule to the Balance Sheet
Every NBFC shall append to its B/S particulars in the format as set in schedule
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Yearly |
All NBFC
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Para 9C |
Transaction in Government Securities
NBFC shall hold investment in approved securities in a dematerialised form only.
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Ongoing |
All NBFC
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Para 10 |
Requirement as to Capital adequacy
NBFC shall maintain minimum capital ratio
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Ongoing |
NBFC accepting / holding Public Deposit
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Para 11 |
Loan against NBFC’s own shares prohibited
No loan against own shares shall be given
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Ongoing |
All NBFC
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Para 11A |
NBFC failing to repay public deposit prohibited from making loans and investments
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As long as default exists/td>
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NBFC accepting / holding public deposit
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Para 11B |
Restrictions on investment in land and building and unquoted shares
Restriction has been specified (10% of NOF)
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Ongoing |
NBFC accepting / holding public deposit
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Para 12 |
Concentration of credit / investment
Restriction has been specified (Lend or invest to single person 15% and group 25%) (Both lend and invest 25% and 40% respectively)
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Ongoing |
NBFC accepting / holding Public Deposits
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Para 13 |
Submission of half-yearly return
Half yearly return in Form – NBS-2 to be submitted |
Half Yealy |
NBFC accepting / holding Public Deposit and RNBFC
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Para 13A |
Information in regard to change of address, directors, auditors, Principal officer, etc. to be submitted by NBFC’s not accepting/holding public deposit
Within 30 days from the date of occurrence of any change
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Whenever change occur |
All NBFC
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Para 13B |
Exposure to Capital Market
Quarterly return in Form NBS-6 |
Quarterly |
NBFC holding public deposit of Rs.50 crore or more and RNBFC having liabilities of Rs.50 crores or more
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Para 13C |
Norms relating to Infrastructure Loan
Restructuring of Infrastructure Loan. |
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All NBFC giving Infrastructure Loan
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Under various Notification / Press release issued by Reserve Bank
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Circular No. DNBS (DD) CC.No. 15/02.01/2000-01 dated 27/06/2001
Asset – Liability Management (ALM) System
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Ongoing |
All NBFC having assets more than Rs.100 crores
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Para 13C |
Notification No. RBI/2005-06/157 dated 6th September 2005
Monthly return on important financial parameters on NBFC not accepting / holding public deposits and having assets size of Rs.100 crores and above |
Monthly |
All NBFC having assets more than Rs.100 crores
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