Micro Finance Institutions & Non- Banking Financial Companies NBFCS Part 1
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 objective of Micro Finance Institutions (MFIs) in India?
MFIs aim to provide financial services such as small loans, savings, and insurance to low-income households and micro-entrepreneurs who lack access to formal banking channels.
What is the full form of NBFC as used in Indian financial regulation?
Non-Banking Financial Company regulated by RBI.
Which Act governs the registration and regulation of Non-Banking Financial Companies (NBFCs) in India?
NBFCs are governed by the Reserve Bank of India Act, 1934, specifically under Chapter III-B, which empowers the RBI to regulate and supervise their activities.
Under which section of the RBI Act must every NBFC register with the Reserve Bank?
Section 45-IA of the Reserve Bank of India Act, 1934.
What is the minimum Net Owned Fund (NOF) required for an NBFC to register with the RBI?
An NBFC must have a minimum Net Owned Fund (NOF) of Rs. 2 crore to obtain registration with the Reserve Bank of India.
What is the asset size threshold for classifying an NBFC as systemically important?
Rs. 500 crore or more in total assets.
How does an NBFC-MFI differ from a regular NBFC?
An NBFC-MFI is a non-deposit taking NBFC that deploys at least 85% of its net assets as qualifying assets (small loans to low-income borrowers), whereas a regular NBFC may engage in a broader range of financial activities.
What is the percentage of qualifying assets an NBFC-MFI must maintain as a share of total assets?
At least 85% of net assets must be qualifying assets.
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