Banking Licenses for NBFC’s in banking and its impact on banking.<br />                                      Presented by:...
.<br />WHAT IS NBFC? <br />NON-BANKING FINANCIAL COMPANY<br />THE COMPANY REGISTERED UNDER COMPANIES ACT,1956<br />Registe...
Services By NBFC<br />loans and advances<br />Acquisition of shares<br />Stock, bonds, debentures and securities issued by...
.<br />	NBFC<br />Commercial Banks<br /><ul><li> NBFC cannot accept demand deposits
 Commercial banks accept demand deposits
 NBFC cannot issue cheques
 Commercial banks can issue cheques
 Deposit Insurance and Credit Guarantee Corporation is not available.
 Deposit Insurance and Credit Guarantee Corporation is  available.</li></li></ul><li>.<br />TYPES OF NBFC’s :<br /> EQUIPM...
NBFCs and the private sector can now enter the banking business if they meet RBI’s criteria. This is a major move for the ...
Recent Move<br />India bulls<br />Reliance Capital,<br />Religare,<br />IL&FS, IDFC <br />AdityaBirla Financial Services <...
The entry of new banks will foster greater competition.<br />“The Reserve Bank is considering providing licenses to a limi...
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Banking licenses for nbfc’s in banking its impact

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Banking licenses for nbfc’s in banking its impact

  1. 1. Banking Licenses for NBFC’s in banking and its impact on banking.<br /> Presented by:<br /> Gurmeet Singh<br />Cheetan<br />HarjeetKaur<br />
  2. 2. .<br />WHAT IS NBFC? <br />NON-BANKING FINANCIAL COMPANY<br />THE COMPANY REGISTERED UNDER COMPANIES ACT,1956<br />Register with RBI in terms of the Reserve Bank of India (Amendment) Act, 1997.<br />All NBFCs together currently account for around nine percent of assets of the total financial system.<br />
  3. 3. Services By NBFC<br />loans and advances<br />Acquisition of shares<br />Stock, bonds, debentures and securities issued by government or local authority, <br />leasing, <br />hire-purchase, <br />Insurance business.<br />
  4. 4.
  5. 5. .<br /> NBFC<br />Commercial Banks<br /><ul><li> NBFC cannot accept demand deposits
  6. 6. Commercial banks accept demand deposits
  7. 7. NBFC cannot issue cheques
  8. 8. Commercial banks can issue cheques
  9. 9. Deposit Insurance and Credit Guarantee Corporation is not available.
  10. 10. Deposit Insurance and Credit Guarantee Corporation is available.</li></li></ul><li>.<br />TYPES OF NBFC’s :<br /> EQUIPMENT LEASING COMPANY<br /> HIRE-PURCHASE COMPANY<br /> LOAN COMPANY<br /> INVESTMENT COMPANY <br />
  11. 11. NBFCs and the private sector can now enter the banking business if they meet RBI’s criteria. This is a major move for the financial sector<br />“The RBI is considering new bank licenses to promoters in the private sector and also NBFCs, if they meet the eligibility criteria of the RBI,” Pranab Mukherjee said while presenting the annual Budget for 2010-11 in the LokSabha.<br />
  12. 12. Recent Move<br />India bulls<br />Reliance Capital,<br />Religare,<br />IL&FS, IDFC <br />AdityaBirla Financial Services <br /> This is a significant step towards further strengthening and broadening the banking sector and bringing it closer to the AAM AADMI,”.<br />.<br />
  13. 13. The entry of new banks will foster greater competition.<br />“The Reserve Bank is considering providing licenses to a limited number of new banks.<br />A larger number of banks would foster greater competition, and thereby reduce costs and improve the quality of service.”<br />The greater competition would also promote financial inclusion.<br />
  14. 14. .<br />INDIAN SCENARIO<br />Public sector banks = 27<br />New private sector banks=7 <br />Old private sector banks=5, <br />Foreign banks=31<br />Regional rural banks=86<br />Local area banks=4<br />Urban cooperative banks=1721<br />State cooperative banks=31<br />District central co-operative banks=371.<br />Minimum capital requirements for new banks and promoters’ contribution, caps on promoter shareholding and other shareholders, foreign shareholding.<br />
  15. 15. Positive Impact of NBFC’S<br /><ul><li> Strengthen Banking system
  16. 16. Improvement in Quality of finance services
  17. 17. Reach of Market
  18. 18. Rural segment Focus through micro Finance</li></li></ul><li> Negative Impact of NBFC’S<br /><ul><li>Increase in Competition
  19. 19. Difficult to implement Monetary Policy.
  20. 20. Decrease in regulation power of RBI
  21. 21. Excess credit formation</li></li></ul><li>Thanks<br />

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