RECLASSIFICATION OF NBFCS
CIRCULAR NO. DNBS.PD. CC NO. 128 /
03.02.059 /2008-09, DATED 15-9-2008
Please
refer to Company Circular DNBS.PD. CC No. 85 / 03.02.089 /2006-07 dated
December 06, 2006 on the captioned subject. It was advised therein that NBFCs
financing real / physical assets for productive / economic activity will be
classified as Asset Finance Company (AFC) as per the criteria given under
paragraph 4 of that circular. Consequent upon re-classification of NBFCs,
in the proposed structure the following categories of NBFCs will emerge:
(i)
Asset Finance Company
(ii) Investment Company
(iii) Loan Company
2.
Accordingly, it was advised that the companies satisfying the conditions
specified may approach the Regional Office in the jurisdiction of which their
Registered Office is located, along with the original Certificate of
Registration (CoR) issued by the Bank to recognize their classification as
Asset Finance Companies. Their request must be supported by their Statutory
Auditors’ certificate indicating the asset / income pattern of the company as
on March 31, 2006. The change in classification would be incorporated in the
Certificate of Registration issued by the Bank as NBFC-Asset Finance Company;
NBFC-D-AFC if accepting deposits and NBFC-ND-AFC, if not accepting deposits.
3.
It has been observed that though NBFCs were advised to approach Regional Office
in their jurisdiction duly supported by statutory auditors' certificate
indicating the asset / income pattern of the companies as on March 31, 2006,
the progress in this regard is not satisfactory. Since Equipment Leasing (EL)
and Hire-Purchase (HP) classification is no longer valid, it is desirable to
accord the valid classification to such NBFCs.
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