Non Banking Financial Companies
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Banking Regulations and Business Laws — CAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is the primary legislation governing Non-Banking Financial Companies in India?
NBFCs are primarily governed by the Reserve Bank of India Act, 1934, specifically Chapter III-B, which empowers RBI to regulate their deposit-taking and financial activities.
What is the minimum asset size threshold for classifying an NBFC as systemically important (NBFC-ND-SI)?
Rs. 500 crore net assets marks NBFC-ND-SI threshold.
What minimum Net Owned Fund is required for an NBFC to register with RBI?
An NBFC must have a minimum Net Owned Fund (NOF) of Rs. 10 crore to obtain a Certificate of Registration from RBI, as per revised guidelines effective October 2022.
What does the acronym 'NBFC-D' stand for in RBI's regulatory classification?
NBFC-D stands for Non-Banking Financial Company accepting Deposits.
What distinguishes an NBFC from a bank under Indian law?
Unlike banks, NBFCs cannot accept demand deposits, do not form part of the payment and settlement system, and are not entitled to deposit insurance from DICGC. They also cannot issue cheques drawn on themselves.
What is the full form of 'NBFC-ND' as per RBI regulations?
NBFC-ND means Non-Deposit-taking Non-Banking Financial Company.
Which category of NBFCs are permitted to accept public deposits?
Only NBFCs classified as NBFC-D (Deposit-taking NBFCs) are permitted to accept public deposits, subject to specific RBI regulations on quantum, tenure, and interest rates.
Under which Act are NBFCs primarily regulated by the Reserve Bank of India?
NBFCs are regulated under Chapter III-B of the RBI Act, 1934.
Video classes for this chapter
More chapters in Module A - Regulations and Compliance
Master the full BRBL syllabus
Every chapter of Banking Regulations and Business Laws — videos, tests, notes and one-liner decks in one place.