Professional Documents
Culture Documents
Non Banking Finance Company ,: Nirc Icsi
Non Banking Finance Company ,: Nirc Icsi
Non Banking Finance Company ,: Nirc Icsi
Company
NIRC, ICSI
• Meaning of NBFC
• NBFCs – Liabilities based classification
• NBFCs – Asset based classification
• NBFCs Size based classification
NBFCs – Size based classification
• Asset Income Approach
• Net owned fund requirement
• Formation Procedure
NIRC, ICSI Sharad Tyagi 2
Topics Covered
Topics Covered
• Raising of Funds
• Compliances –
p Co’s Act, 2013
,
• Compliances – SEBI Laws
• Compliances RBI Laws
Compliances – RBI Laws
• No. of Subsidiaries
• Related Party Transactions
• , ,g
Investment, loan, guarantee etc.
NIRC, ICSI Sharad Tyagi 3
Topics covered
Topics covered
• Change in Control
Change in Control
• Merger & Amalgamation
• FDI in NBFCs
i C
• Statutory Auditor Certificate
• Auditor’s Report
• Returns Requirement
Returns Requirement
• Recent Amendments
“Non‐Banking Institution”
“Non‐ Banking Institution” ‐‐ means a
company , corporation or co
company , corporation or co‐
ti ‐operative society
ti i t
• Asset Based Classification
d Cl ifi i
• Size Based Classification
• NBFCs having public deposits or NBFCs‐D
• NBFCs not having public deposits or NBFCs‐ND
60% of Total Assets in Financing Real/Physical Assets &
60% of Total Income arises from the aforesaid Assets
50% of Total Assets in Investment Activity &
50% of Total Income arises from the aforesaid Assets
50% of Total Assets in Lending &
50% of Total Assets in Lending &
50% of Total Income arises from the aforesaid Assets
Mi i
Minimum N Owned
Net O d Funds
F d – INR 300 Lakhs
L kh
AND
Not less than 60% of Net Assets are held as equity stake
Not less than 60% of Net Assets are held as equity stake
in Group Companies
in Group Companies
At least 75% of its total assets should be financial assets
AND
At least 75% of its gross income should be from factoring
business
NIRC, ICSI Sharad Tyagi 17
NBFC ‐ MFI
NBFC
An NBFC
NBFC‐MFIMFI is defined as a non
non‐deposit
deposit taking
NBFC (other than a company licensed under
Section 25 of the Indian Companies Act, Act 1956)
that fulfils the following conditions:
Min NOF ‐‐ 5 Crores
Min NOF
AND
N
Not less than 85% of its net assets are in the nature
tl th 85% f it t t i th t
of “qualifying assets”
MIN. INR 200 LAKHS AT ALL THE TIME
UNLESS OTHERWISE SPECIFIED
PRIOR
PRIOR PERMISSION OF THE
SSPERMISSION OF THE
PRIOR PERMISSION OF THE RBI REQUIRED
O O O Q
RBI IS REQUIRED
Private Public Issue
Placement
Equity/preference
q yp
instruments, bond,
commercial papers,
debentures deposits
debentures, deposits,
bank finance to NBFCs
etc.
• Exemption to NBFCS –
i CS not available
il bl
• Horizontal Vs Vertical
Horizontal Vs Vertical
NIRC, ICSI Sharad Tyagi 29
L/G/S to Specified Category
L/G/S to Specified Category
• Section 186 of the Companies Act, 2013
Auditors
di to submit
b i Report to the
h Board
d off
Directors
The auditor shall also make a separate
report to the Board of Directors of the
Company
IIn the
th case off allll non‐banking
b ki fi
financial
i l
companies
I Whether the company is engaged in the
I.
business of NBFI and whether it has obtained a
Certificate of Registration (CoR) from the Bank
Additional
ddi i l Reporting
i ini respect off NBFC‐ND‐SI
C S
((a)) Calculation
C l l ti and
d compliance
li with
ith Capital
C it l
adequacy requirements
• NBFC having
h overseas investment : quarterly
l return
NIRC, ICSI Sharad Tyagi 43
Recent Amendments
Recent Amendments
• NBFCs need to display grievance redressal
mechanism and contact details of grievance
redressal officer at prominent place in
offices/branches/places of business
• Fair Practices Code (which should preferably in
the vernacular language as understood by the
borrower) based on the guidelines announced
should be put in place by all NBFCs with the
approval of their Boards
NIRC, ICSI Sharad Tyagi 44
Recent Amendments…cont…
Recent Amendments…cont…
• Revision in format for submission of returns
for PMLA compliances and Uploading of
Reports in 'Test Mode' on FINnet Gateway for
PMLA Reporting
• Facilityy to NBFC‐ND‐SI ‐ Direct Access to
Negotiated Dealing System‐Order Matching
• Change in Loan to Value ratio for companies
predominantly in loan against gold products
48
Contact Details:
Sh d T i
Sharad Tyagi
Associate Partner
Seth Dua
Seth Dua & Associates
Mb: 9717105904
E‐mail:
mail: c.s.sharad@gmail.com
mail: c.s.sharad@gmail.com
c s sharad@gmail com
49