Essay on Management

2099 Words Feb 14th, 2012 9 Pages
NOTE ON NON-BANKING FINANCIAL COMPANIES

DEFINITION OF NON BANKING FINANCIAL COMPANY

Prior to enactment of RBI (Amendment) act, 1997 w.e.f. 9.1.1997 the RBI Act,1934 did not contain a definition for NBFC. Clause (f) of section 45-I inserted by RBI (Amendment) Act 1997, provided the definition of a NBFC. According to this clause: NBFC means- (i) a financial institution which is a company; (ii) a non- banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; (iii) such other non-banking institution or class of such institutions, as the bank may,
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Explanation: For the purpose of this clause, “industrial activity” means any activity specified in sub-clauses (i) to (xviii) of clause © of section 2 of the IDBI Act, 1964 (18 of 1964) A “non-banking institution” has been defined in clause © of section 451, to mean a company, corporation or coop. Society The Service Mix of NBFCS has all the features of product mix such as variety, ranges in variety and overall synergy of the mix.

Registration of NBFCs with RBI has been made mandatory bythe Reserve Bank of India (Amendment) Act, 1997. Under newly inserted Section 45IA, every NBFC is required to have a certificate of registration and also have a net owned funds (NOF) of not less than Rs.25 Lacs to commence or carry on the business of non-banking financial institution. Reserve Bank, however, can raise

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