AS 3 and NBFCs - urgent - Audit

The term "Financial Institution" has been defined in Companies (Acceptance of Deposits) Rules, 1975.

the term 'financial institution' shall mean:-

(a) a public financial institution specified in or under section 4A of the Companies Act, 1956 ;

(b) a State Financial, Industrial or Investment Corporation ;

(c) the State Bank of India or a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959) ;

(d) a nationalized bank, that is to say, a corresponding new bank as defined in section 2 of :-

(i) the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) ; or

(ii) the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980);

(e) the General Insurance Corporation of India established in pursuance of the provisions of section 9 of the General Insurance Business (Nationalization) Act, 1972 (57 of 1972);

(f) the Industrial Reconstruction Corporation of India; or

(g) any other Institution which the Central Government may, by

notification, specify in this behalf.

It may be noted that Statement on the Companies (Auditor's Report ) Order, 2003 issued by ICAi, it was stated in Para 22 that "Non-Banking Financial Company" is not a financial institution.