NON BANKING FINANCIAL SERVICES FIRMS

NON- BANKING FINANCE COMPANIES The company registered company act 1956

Registration under RBI act, 1934 under section 45-IA

Provide banking services without meeting legal definition of bank such as holding a bank license

WHAT IS NBFC ?

Engages in the business of loan and advances acquisition of shares/ stock/bonds/debenture/ security issued by government or local authority or other securities of like marketable nature, leasing, hire-purchase, insurance business, chit business but dose not include any institution whose principal business is that of agriculture activity, industrial activity, sale/purchase/construction of immovable property.

Cont…

NBFC can not accept DEMAND DEPOSITES .

It is not apart of PAYMENT and SETTLEMENT system that’s why is can not issues cheques to its customers.

Deposit insurance facility of DICGC is not available for NBFC depositors.

HOW NBFC IS DIFFER FROME BANK

In section 45-IA RBI act , 1934 NBFC should be registered with RBI.

But not for all category of NBFC’S.

There are certain category of NBFC which are regulated by other regulators

Doses NBFC registered with RBI

Hosing finance company are regulated by national housing bank.

Venture capital fund, stock broking company are registered with SEBI.

Insurances companies holding a valid certificate of registration is issued by IRDA.

Nidhi companies registered under section 620-A companies act 1956.

As…

NBFC should have minimum net owned fund 2 crore.

The company is required to submit its application for registration in the prescribed format along with necessary document for bank consideration.

REQUIREMENT FOR REGISTRATION

Equipment leasing (EL)

Hire purchase (HP)

Investment companies(IC)

Loan companies (LC)

Classification base on purpose of acceptance of deposits by NBFC direction 1998

Asset finance companies (AFC)

Investment companies (IC)

Loan companies (LC)

RE-CLASIFICATION OF NBFC’S ON DECEMBER 6,2006

No, all NBFC not accept public deposits

SO… WHAT ARE THE REQUIRMENT FOR

ACCEPTING?

Let us… know..

CAN ALL NBFC ACCEPT PUBLIC DEPOSITS ?

Companies accepting public deposits are required to comply with all prudential norms are…

Income recognition, asset classification, accounting standard, provision for bad & doubtful dept, capital adequacy, credit/ investment concentration .

Regulation of NBFC accept public deposits

An NBFC having NOF of Rs 2oo lack and above can accept public deposits.

It has to obtain minimum stipulated credit rating from any one of the approved credit rating agencies at lest once in a year.

Copy of credit rating should be sent to the RBI.

NBFC should have acquired a credit rating of not less then AAA rating or its equivalent in the previous year.

Eligibility criteria for accepting public deposits

If the credit rating is either down graded or up graded, NBFC required to repot to RBI with in 15days from the date its receives such information.

the deposits taken by the NBFC are repayable on demand and the minimum period for which pd can accepted is not less then 12 month with the maximum period of 60 month.

The CRAR has been fixed 12% &above (rated NBFC’S) & 15% above ( un-rated NBFC’S).

Credit & investment concentration norms has been fixed at 15%/25%.

The total loan & investment have a ceiling of 25%& 40% of the owned fund.

All regulation related to interest rate, period and ceiling on quantum of borrowing do not apply.

However to insure the true and the fair picture of there financial health, those co. are sub. To prudential norms.

Investment company are exempted from all the provision of the direction except the statutory provision for registration & creation of reserve fund.

Regulation of NBFC not accepting public deposits

AS recognized by the RBI & expert commits/task force

Development of sector like transport & insurance substantial employment generation Help & increase wealth creation Broad base economic development Irreplaceable supplement to bank credit in rural

segment Major thrust on semi-urban, rural area & 1st time

buyers/users To finance economically weaker section huge contribution to the state exchequer

ROLE OF NBFC

IS a part of the reliance – anil dhirubhai ambani group.

Reliance capital is one of India's leading & fastest growing private sector financial services co. , & rank among the top 3 private sector financial services & banking co. , in terms of net worth.

Reliance capital has interest in asset management & mutual fund, life & general insurance, private equity & proprietary investment, stock broking & other activities in financial services.

RELIANCE CAPITAL LTD.

Reliance capital consolidate total income of Rs 16 billion & a consolidate net profit of

Rs 602 million for quarter ended December 31, 2011.

Reliance capital consolidate total income of Rs 15 billion & a consolidate net profit of Rs 334 million for the quarter ended September 31, 2011.

Employees -1100

Reliance capital ltd intended to be a well respected global player in the international financial services sector. It is presently in Singapore, Malaysia, united kingdom & united Arab emirates.

PFC was set up on 16th July 1986 as a Financial Institution (FI) dedicated to Power Sector financing and committed to the integrated development of the power and associated sectors. The Corporation was notified as a Public Financial Institution in 1990 under Companies Act, 1956. The Corporation is registered as a Non Banking Financial Company with the Reserve Bank of India (RBI). RBI, vide its revised Certificate of Registration no. B-14.00004 dated July 28, 2010 classified the company as an ‘Infrastructure Finance Company (NBFC-ND-IFC)’.

POWER FINANCES CORPORATION LTD.

Ultra Mega Power Projects (UMPPs) Restructured Accelerated Power

Development and Reform Programme (RAPDRP)

Independent Transmission Projects (ITPs) Distribution Reforms, Upgrades &

Management (DRUM Delivery through Decentralized

Management (DDM)

Government of India Initiatives

To insure successful survival of NBFC’S in the wake of highly competitive environment, they will have to enter into merger & joint venture so as to prune down their field of activities & hive of problematic areas. NBFC should also explore the possibilities of expanding into non-traditional fund based & fee based areas where they have core expertise.

CONCLUSION & SUGGESTIONS

Thank you

http://www.rbi.org.in/scripts/FAQView.aspx?Id=71 http://en.wikipedia.org/wiki/Non-banking_financial_company http://en.wikipedia.org/wiki/Power_Finance_Corporation http://www.pfcindia.com/ http://www.reliancecapital.co.in/ourbusiness_ib.html book-Management of Indian financial institutions

Submitted byRamandeep kaurRoll no- 5290MBA 1st sec (e) 2nd sem