CAIIB · CB · Chapter 17

Non-Banking Financial Institutions Development Regulation and Supervision

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Central Banking (Elective) — CAIIB.

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Q

What is the primary role of NBFCs in India's financial system?

A

Mobilise resources and channel credit to underserved segments like infrastructure, microfinance, and informal-income housing.

Q

Name two key differences between banks and NBFCs.

A

Banks accept deposits from anyone and run payment systems; NBFCs operate within narrow mandates and cannot issue cheques.

Q

What is the minimum Net Owned Fund (NOF) for NBFC-ICC, NBFC-MFI, NBFC-Factor under SBR?

A

₹10 crore (effective March 31, 2027, with glide path from ₹2 crore baseline).

Q

Define the '50-50 test' for NBFC registration.

A

More than 50% of total assets and 50% of gross income must be financial in nature.

Q

What is NBFC-ND-SI? State the asset-size threshold.

A

Non-Deposit-taking Systemically Important NBFC with assets ≥₹500 crore; subsumed under Middle Layer in SBR.

Q

Which regulators supervise NBFCs outside RBI's direct purview?

A

SEBI, IRDAI, PFRDA; entities fall within NBFC universe but are sectoral-regulator regulated.

Q

What was NBFC sector's asset CAGR (2009–2019) versus SCB CAGR?

A

NBFC: 18.6% CAGR vs SCB: 10.7% CAGR; NBFCs grew 1.7× faster.

Q

State NBFC sector's aggregate asset size as on March 31, 2020.

A

₹51.47 lakh crore (including Housing Finance Companies).

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