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10 views3 pages

NBFC

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MSA OFFICE
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© © All Rights Reserved
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NON-BANKING FINANCIAL CORPORATION

 NBFC: A Non-Banking Financial Corporation is a company which is


registered under the Companies Act, 1956 or the Companies Act,
2013 and is involved in the lending business, hire-purchase, leasing,
insurance business, receiving deposits in some cases, chit funds,
stocks and shares acquisition, etc. The functions of the NBFCs are
managed by both the Ministry of Corporate Affairs and the Reserve
Bank of India.

 TYPES OF NBFC: The NBFCs can be categorised under two broad


heads:
1. On the nature of their activity
2. On the basis of deposits

1. On the nature of their activity:


a. Asset Finance Company
b. Loan Company
c. Mortgage Guarantee Company
d. Investment Company
e. Core Investment Company
f. Infrastructure Finance Company
g. Micro Finance Company
h. Housing Finance Company

2. On the basis of deposits:


a. Deposit accepting Non-Banking Financial Corporations
b. Non-deposit accepting Non-Banking Financial Corporations

 ELIGIBILITY CRITERIA FOR NBFC:


1. The business should be registered as a company under the
Companies Act, 1956, or 2013.
2. The minimum capital (Net Owned Fund) requirement is Rs. 2
crores.
3. The principal business of the applicant should be financial
activities. If the financial flow of the business is more than
50% of the total capital asset, then that company can get
NBFC registration.
4. It should have at least 1 Director from the financial field or a
senior banker as a Director.
5. The CIBIL (Credit Information Bureau Limited) records
should be clean.
 LIST OF DOCUMENTS:
1. Company’s Incorporation Certificate
2. Company’s Bank Account with a minimum paid-up equity share
capital of Rs. 2 crore
3. MoA & AoA
4. Address proof of the company
5. Duly filled up and signed Annexure I, II, and III
6. Details about the Directors
7. Documents of administration and management of the company
8. Audited financial accounts for the last 3-years
9. Board resolution approving the company’s registration as an NBFC
10. A brief overview of the company’s works and activities in the
past 3 years
11. Income tax, PAN, etc.
12. Any other relevant documents.

 Microfinance Institution:
1. NBFC-MFI is an ND-NBFC (Non-Deposit Accepting NBFC) with not
less than 85% of its assets in the nature of qualifying assets that
satisfy the following criteria:
a. loan disbursed by it to a borrower having a rural household annual
income not exceeding Rs. 60,000 or urban and semi-urban
household income not exceeding Rs. 1,20,000,
b. the loan amount is not more than Rs. 35,000 in the first cycle and
Rs. 50,000 in subsequent cycles,
c. the total indebtedness of the borrower is not more than Rs. 50,000,
duration of the loan not to be less than 24 months for loan amount
in excess of Rs. 15,000 with prepayment without penalty, loan to
be extended without any security,
d. the aggregate amount of loans, given for income generation, is not
less than 75% of the total loans given by the MFIs,
e. the loan is repayable on weekly, fortnightly, or monthly instalments
at the option of the borrower.

 NBFC YEARLY COMPLIANCES

FORM NAME PURPOSE OF THE FORM DEPARTMENT

Submitted by all non-deposit taking NBFCS

ALM Return Asset liability mismatches and RBI


interest rate exposure

Submitted by all residuary nonbanking companies


Form NBS Annual Return on Deposits (Filed Regional Office of Department of Non-
1A annually after March 31 and latest Banking Supervision, RBI where
by September 30) registered office of the company is
situated

Submitted by NBFCS having the asset of Rs 100 to Rs 500 Cr

NBS8 Annual Return on Non-Deposit RBI


taking NBFC with Asset Size from
Rs.100 Cr. To 500 Cr

Submitted by NBFCS having asset size below Rs 100 Cr

NBS9 Annual Return on NBFCNDSI With RBI


Asset Size Below Rs.100 Cr

Submitted by all nonbanking financial companies accepting/holding public deposits, and


MNBCS except residuary nonbanking companies

NBS4 Repayment of Deposits only in Department of Non-Banking


respect of rejected/cancelled Supervision, RBI
companies

CA certificate Certifying NBS4 RBI


form NBS – 4

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