NBFC Flowchart

Saturday, October 22, 2022 6:08 PM

NBFC Rules General NBFC Regulations

3. Eligibility Criteria 3. Application of this part
Companies Act , 2017
- NBFC may be established Promoters, Proposed Directors, Chief Executive and Chairman of Board - Asset Management Service + Leasing + Housing Finance Service + Investment Advisory Service +
Companies Ordinance, 1984 of Director. Investment Finance Service
- Fit and Proper criteria NBFC Regulations.
282 A Application of this part Schedule IX 9. Prevention - Money Laundering + TF
1. Investment Finance Service. SECP + Federal Government - L&R + Addition
2. Leasing. 4. Permission to Form NBFC - True Identity of Customer and Investment
3. Housing Finance Service. - Person - Application - Commissioner. Accept Money after account opening
4. Discounting Service. Satisfied - ORDER - 6 Months (To Establish NBFC) Effective Procedure for Identification of Customer.
5. Venture Capital Investment. Further 3 Months.
6. Investment Advisory Service. - Comply with Rules and Regulation
7. Asset Management Service 16 5. Condition for Grant of License - Cash Receipt and Payment not exceeding Rs.50,000.
8. Any Other form of Business. - Separate Application to Commission . Exception - Repayment of Finance.
- Fund Management NBFC not Eligible for lending NBFC business and vice versa.
- License Investment Finance Service shall be valid Housing Finance Service + Leasing + Discounting 10. Procedure for Approval for Appointment of Director and Chief Executive
282 B Power to Make Rules, Regulation Service. Before 10 Days After
- Federal Government - Rules - Establishment and Regulation of NBFC.
- Commission - Regulations. Company not part of GC already holding license. A. Appointment of IND Director
- Minimum Equity Requirement + 25% of paid up Share capital to promoters. Data Bank - Companies Act
282 C Incorporation of NBFC - Promoters deposit blocked CDC shall not be sold on
- Prior Approval of SECP - For Incorporation. Exception - Directors - QS - Max 2% Lending NBFC
- Shall not Carry on Business unless it holds License - Chief Executive Officer - Not hold office in any other comp 15. (B) Limit on Aggregate Liabilities of an NBFC
- Commence or Carrying Business minimum equity. Exception - IC Being managed by Limits Non Deposit Taking NBFC
- Shall not change Memorandum of Association AL - Excluding CL + SD
282 D Power to Issue Directions Exception - AC - SECP Approval. Shall not Exceed 10 times of equity.
SECP - Satisfied - Comply with NBFC Rules and Regulation.
- Public Interest. Executive employ Competent. 16. Creation of Reserve Fund
- Prevent the Affairs Detrimental to the Interest of Shareholder. - HOB + Licensed Activity. - Deposit Taking lending NBFC
- Secure proper Management of NBFC.
20% of Profit after tax till equal to PV Capital
Issue Directions If Business not commenced License Cancelled. Thereafter
Valid for 3 years + Renew 1 month. 5% Profit after Tax.
282 E Power to Remove
Continued Association of any Chairman, Director, Chief Executive or Any Officer - REMOVE 7. Conditions Applicable to NBFC Shall 17. Maximum Exposure FB
- BOK + 10 years + T & FV - IAS NFB
282 F Power to Supersede Board of Director Quarterly and Annual Financial Statement - Commissioner Approved
- Total period of supersession does not exceed 3 years Statutory + Auditor + List of Auditor - Single Person - Group
- By such person - Commission may from time to time Appoint. CAO + CO Appoint Internal Auditor + Executives 20% of own Equity 25% of own Equity
E Director FB - 15% Exceed x FB - 20% Exceed x
282 G Power to Require to Furnish Information
No NBFC makes False Information. - Money Laundering - Microfinancing
Obtain and publish rating + Code of Conduct Poor person = 1.3 million HL
282 H Special Audit Membership Rs. 600,000 0.5 million GL
- Order Special Audit + Appoint an Auditor. Shall Not
Director in the other NBFC same licensed - Micro Enterprise = 1.5 million
282 I Inquiry by the Commission Appoint or Change Chief Executive or Director Not Exceeding 10 Employees
- Affairs of the Company
Directors, Managers or Other. - Transaction A. Maintenance of CAR
Exception policy + Board of Director Approval Deposit taking NBFC 10%
- Hold or make Investment in Subsidiary other than FSC
Minimum 5 years B. Asset Liability management System
10% of equity Strategic Investment with Approval of SECP. Board of Director - establish Internal prudential
Limit - for Asset Liabilities MM
Prior Approval of Commissioner
- Subsidiary + SI + Merger Acquisition C. Exposure Limit in Capital Market
Aggregate 50% of own equity - Listed Equity - Single Company

18. Limit on Clean Placement

10% Own Equity
Lower
Paid up capital of
Investee.

- FI - Rated At least
Aggregate exposure of deposit taking NBFC shall not exceed its equity.

19. Limit on unsecured

- Aggregate deposit taking NBFC shall not Exceed 50% of Equity.