Loan by nbfc to any sister concern
This query is : Resolved
30 March 2014
can an nbfc registered as limited give loan to its sister concern as per rbi guidelines?
30 March 2014
well practical experience wise, NBFCs do lend to their related parties.
However the impact of section 185/186 of the Companies Act 2013 needs to be checked out.
However the impact of section 185/186 of the Companies Act 2013 needs to be checked out.
31 March 2014
I need explanation on rbi guidelines issued on this matter.
31 March 2014
as per RBI it is clearly allowed. rather these loans are specifically reduced from the net owned funds.
please refer http://rbidocs.rbi.org.in/rdocs/notification/PDFs/57MC01072013BF.pdf
please refer http://rbidocs.rbi.org.in/rdocs/notification/PDFs/57MC01072013BF.pdf
31 March 2014
however NBFCs are not eligible to have bank credit for such lending to subsidiaries.
31 March 2014
means upon giving loans to sister concern, net owned funds of the lending NBFC shall get reduced by 10%..
31 March 2014
no. it means that lets say aggregate capital plus reserves is Rs 100...so upto ten percent ie Rs 10, investment/loan to subsidiaries etc is no issue. Anything above 10% shall be reduced. so if loan to subsidiary is Rs 15, then for computation of net owned funds, amounts in excess of Rs 10, ie Rs 5 shall be deducted.
also refer to Point 5 of the circular.
also refer to Point 5 of the circular.
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