Micro Finance Institutions & Non- Banking Financial Companies NBFCS Part 2
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Indian Economy and Indian Financial System — JAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is the primary regulatory authority for Non-Banking Financial Companies (NBFCs) in India?
The Reserve Bank of India (RBI) is the primary regulatory authority for NBFCs under the Reserve Bank of India Act, 1934.
What is the maximum loan amount for a microfinance borrower in rural areas as per RBI guidelines?
Up to Rs. 1.25 lakh for rural borrowers per RBI norms.
What is the minimum Net Owned Fund (NOF) requirement for an NBFC to register with RBI?
An NBFC must have a minimum Net Owned Fund of Rs. 10 crore to register with the RBI, as per the revised guidelines effective October 2022.
What is the maximum loan amount permitted for microfinance borrowers in urban or semi-urban areas?
Up to Rs. 2 lakh for urban and semi-urban microfinance borrowers.
What distinguishes an NBFC from a bank in terms of accepting deposits?
Unlike banks, most NBFCs cannot accept demand deposits and are not part of the payment and settlement system; they also lack access to deposit insurance from DICGC.
What percentage of total assets must NBFC-MFIs maintain in the form of qualifying microfinance loans?
At least 85% of net assets must be qualifying microfinance loans.
What is an NBFC-MFI and what does MFI stand for?
NBFC-MFI stands for Non-Banking Financial Company – Micro Finance Institution, which is a non-deposit taking NBFC having at least 85% of its net assets as qualifying microfinance assets.
What is the Base Layer in RBI's scale-based regulation framework for NBFCs?
Base Layer comprises non-deposit-taking NBFCs with assets below Rs. 1000 crore.
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