the powerpoint highlights the concept of NBFCs. major NBFCs in India.

1. NBFCs
Non
BankingFinance
Companie
s
Presented By – Dhanashri Durgaram Shet

2. *
o Introduction
o Features
o Requirements for Registration
o Important points to be remember about NBFCs
o Types of NBFCs
o Regulatory norms
o Growth of NBFCs in India
o White Label Machine
o News of NBFC

3. * financial Institutions.
They are the one which does not accept deposits like
banking companies. But provide similar banking
services like
providing Loans and advances, acquisition of shares,
stock, bonds, hire purchase, insurance business or chit
business, Credits etc.
Introduction

4. NBFCs are registered under the Companies Act 1956 of India,
whereas banks are regulated under Banking Regulation Act 1949.
The Principal activities of NBFCs include equipment leasing, hire
purchase, loan & investment and asset finance.
However NBFCs working and operations are regulated by the
Reserve Bank of India within the framework of the Reserve Bank
of India Act, 1934 (chapter III B)

5. *
• They are allowed to accept deposit for 12 months to
maximum 60 months. They cannot accepts deposits that are
repayable on demand.
• NBFC cannot offer interest rate higher than the ceiling
prescribed by the RBI from time to time. The ceiling is 11%
per annum.
• NBFC cannot offer gift/incentives or any other additional
benefit to the depositors.
• They should have minimum investment grade credit rating.
• The deposits with NBFC are not insured.
• The repayment of deposits by NBFCs is not guaranteed by
RBI.

6. What are the requirements for registration of NBFC in India.
1. The company should have minimum net owned fund of Rs. 25
Lakh.
2. The company is required to submit its application for
registration in the prescribed format along with necessary
documents for banks consideration.
3. The bank issues certificate of registration after satisfying itself
that the conditions as enumerated in section 45-IA of the RBI
act 1934 are satisfied.
4. The list of registered NBFC is available on the website of RBI
and can be viewed at www.rbi.org.in

7. *
A NBFC is not part of Payment and Settlement system and
as such cannot issue cheques drawn on itself.
An NBFC is not required to maintain Reserve Ratios (CRR,
SLR etc.)
An NBFC cannot indulge primarily in Agricultural,
Industrial activity, Sale and Purchase, Construction of
immovable property etc.
Foreign investment allowed up to 100%

8. NBFCs cannot accept demand deposits from public.
Though special permission is given to LIC and GIC by RBI. These two NBFCs
can take demand deposits.
The deposits are not insured and covered under Deposit Insurance and Credit
guarantee Corporation (DIGC), which generally covers bank accounts.

9. * Depending upon the nature of activities NBFCs are
classified as follows:
1. Development Finance Institutions
2. Leasing companies
3. Housing Finance companies
4. Investment companies
5. Venture capital companies
 Effective from 24 April 2004, NBFC cannot accept deposits
from Non Resident Individual (NRI) except debit to NRO
account of NRI. However existing NRI deposits can be
renewed.

10. *
• NBFCs in operation before 1999 are to raise their minimum net owned funds to Rs.
2 crore from March 2017 from Rs. 25 lakh.
• NBFCs are now required to mark a loan as debt if the interest has not been paid for
90 days or 3 months.
• Provisions for standard asset has also been raised from 0.25% to of loans
outstanding to 0.40%.
• The NBFCs has to take credit rating from the credit rating agencies.

11. Types of NBFCs
AFC – Asset Finance company
IC – Investment Company
LC – Loan Company

12. IFC – Infrastructure Finance Company
NBFC Factor

13. *

15. White label ATM (WLA)
* Automated Teller Machines (ATMs) set up owned by NBFC are
called as White label ATMs.
*the non- bank entities which owns this ATMs are called as White
label ATM Operators (WLAO).
*They charge extra money for providing this service and generally
operates in semi-urban and rural areas.
* Tata Communications Payment Solutions Limited is the first
company to open WLA. It got launched under the brand name
“Indicash”

16. There are 7 NBFCs which provides WLA:
1. Muthoot finance ltd.
2. Riddhi Siddhi Bullions Ltd.
3. BTI payments Pvt Ltd.
4. Srei infrastructure Finance Ltd.
5. Tata communications Payment solutions
6. Prizm payment service Ltd.
7. Vakrangee Ltd.

17. *

18. References:
• https://m.rediff.com/money/2007/jul/20nbfc.html
• https://en.m.wikipedia.org/wiki/Non-bank_financial_institution
• http://m.economictimes.com/industry/banking/finance/nbfcs-can-
offer-safe-deposit-locker/articleshow/50759251.cms
• https://en.m.wikipedia.org/wiki/NBFC_%26_MFI_in_India
• http://ourprofessionalteam.com/index.php?option=com_content&vi
ew=article&id=2877&catid=359&Itemid=0
• http://www.bankconcepts.in/2015/01/non-banking-finance-
corporations-nbfc.html?m=1
• http://www.arthapedia.in/index.php?title=White_Label_ATMs_(W
LAs)
• https://www.vccircle.com/rbi-notifies-revised-regulatory-norms-
nbfcs/

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