Non Banking Financial Company

This query is : Resolved

Arpita (Querist)
Follow

04 August 2008 If a company's fixed deposit income forms a substanial part of its gross income, does it qualify as a NBFC?

CA N RAJA

CA N RAJA (Expert)
Follow

04 August 2008 Mere accepting of deposits will not make a company as NBFC.

To become a NBFC, the company should have minimum net owned fund as prescribed by RBI.

The company should submit its application for registration in the prescribed format alongwith necessary documents for RBI's consideration.

The RBI then issues certificate of registration after satisfying itself that the conditions as enumerated in Section 45-IA of the RBI Act, 1934 are satisfied.

Additional information:

All NBFCs are not entitled to accept public deposits. Only those NBFCs holding a valid certificate of registration with authorisation to accept public deposits can accept/hold public deposits.

The NBFCs accepting public deposits should have minimum stipulated net owned fund and comply with the directions issued by the RBI.

Arpita

Arpita (Querist)
Follow

05 August 2008 It seems you have got my question wrong. I referred to INCOME from fixed deposits made by a NBFC. If a company's total income consists of more than 50% income from such fixed deposits, will the company satisfy one test of being treated as a NBFC ie having income from financial assets more than 50% of total income?

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
Follow

08 October 2008 You are saying " Income from FD made by NBFC", which means it is already an NBFC according to you! Then why this question?

Secondly, mere income from interest on FD will not make it qualify

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now