NON-BANKING FINANCIAL COMPANIES (NBFCS)
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What is the full form of NBFC?
NBFC stands for Non-Banking Financial Company, which is a company registered under the Companies Act engaged in financial activities but does not hold a banking licence.
What is the minimum asset size for an NBFC to be classified as NBFC-Upper Layer under SBR?
Rs. 50,000 crore or RBI-identified systemic importance
Which Act governs the registration and regulation of NBFCs in India?
NBFCs are governed by the Reserve Bank of India Act, 1934, specifically Chapter III-B, which empowers RBI to regulate deposit-taking and non-deposit-taking NBFCs.
Which type of NBFC is mandated to hold at least 90% of its assets in infrastructure loans?
Infrastructure Finance Company (IFC)
What is the minimum Net Owned Fund (NOF) required for an NBFC to register with RBI?
As per RBI guidelines, the minimum NOF required for registration of a new NBFC is Rs. 10 crore (revised from the earlier Rs. 2 crore threshold).
What is the leverage ratio ceiling prescribed for NBFC-ND-SI (non-deposit taking systemically important NBFCs)?
7 times of owned funds
What distinguishes an NBFC from a bank?
Unlike banks, NBFCs cannot accept demand deposits, are not part of the payment and settlement system, and do not have access to deposit insurance from DICGC.
Under what condition can a company be exempted from the definition of NBFC despite doing financial business?
If its principal business is non-financial (agricultural, industrial, or trading)
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