Nbfc company deals in property sale purchase

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 April 2012 Dear Sir/ Madam,

1. Please let me know that A NBFC Company deals in immovable Property sale & Purchase transaction after amendment in MOA.

2. Any type of compliance/ approval from RBI.
3. Can NBFC Company deal in immovable property sale purchase business.
.

Ajay Mishra

Ajay Mishra (Expert)
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09 April 2012 Hi

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 and is engaged in the business of loans and advances, acquisition of shares/stock/bonds/debentures/securities issued by Government or local authority or other securities of like marketable nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, sale/purchase/construction of immovable property.

So company dealing with immovable property are not covered under NBFC.

Ajay Mishra

Ajay Mishra (Expert)
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09 April 2012 Their are different types of NBFCs registered with RBI:

Originally, NBFCs registered with RBI were classified as:
(i) equipment leasing company;
(ii) hire-purchase company;
(iii) loan company;
(iv) investment company.
However, with effect from December 6, 2006 the above NBFCs registered with RBI have been reclassified as
(i) Asset Finance Company (AFC)
(ii) Investment Company (IC)
(iii) Loan Company (LC)
AFC would be defined as any company which is a financial institution carrying on as its principal business the financing of physical assets supporting productive/economic activity, such as automobiles, tractors, lathe machines, generator sets, earth moving and material handling equipments, moving on own power and general purpose industrial machines. Principal business for this purpose is defined as aggregate of financing real/physical assets supporting economic activity and income arising therefrom is not less than 60% of its total assets and total income respectively.

The above type of companies may be further classified into those accepting deposits or those not accepting deposits.

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