PRESENTATION

ON
NBFC
PREPARED BY:-

SECRETARIAL DEPARTMENT OF ASEEM GLOBAL LIMITED

 CONTENTS

1. MEANING

2. NBFC VS BANK

3. TYPES OF NBFC

4. SALIENT FEATURES OF NBFC

5. REGISTRATION OF NBFC

6. LIST OF DOCUMENTS SUBMITTED WITH APPLICATION TO RBI

7. RESPONSIBILITIES OF NBFC

8. RATING OF NBFC

9. MEANING OF DEPOSIT AND PUBLIC DEPOSIT

10. PRE-PAYMENT OF PUBLIC DEPOSIT

11. LIQUID ASSET REQUIREMENT

12. DEFAULT IN REPAYMENT

13. OTHERS
 1. MEANING

What is a non-banking financial company (NBFC)?

A non-banking financial company (NBFC) is

 a company registered under the Companies Act, 1956 and

 engaged in the business of

1. loans and advances,

2. acquisition of shares/stock/bonds/debentures/securities issued by government

or local authority or other securities of like marketable nature,

3. leasing,

4. hire-purchase,

5. insurance business,

6. chit business,

BUT DOES NOT INCLUDE

any institution whose principal business is that of

1. agriculture activity,

2. industrial activity,

3. sale/purchase/construction of immovable property.

NOTE:-

A non-banking institution which is a company and which has its principal business of receiving
deposits under any scheme or arrangement or any other manner, or lending in any manner is also
a non-banking financial company (residuary non-banking company).
 2. NBFC V/S BANK

NBFC are doing functions similar to banks. What is difference between banks & NBFC?

NBFC + I + II + III = BANK

I A NBFC cannot accept demand deposits (demand deposits are funds deposited at a
depository institution that are payable on demand -- immediately or within a very short
period -- like your current or savings accounts.)

II It is not a part of the payment and settlement system and as such cannot issue cheques to
its customers; and

III Deposit insurance facility of DICGC is not available for NBFC depositors unlike in case of
banks.
 3. TYPES OF NBFC

What are the different types of NBFC registered with RBI?

NBFC
TRADITIONAL MODERN
APPROACH OF APPROACH OF
CLASSIFICATIO CLASSIFICATIO
RESIDUARY
N N
NBFC

Asset Finance
Equipment Hire Purchase
Company Loan Company
Leasing Co. Company

Investment Investment
Loan Company
Company Company

Notes:

1. 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

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

3. Residuary Non-Banking Company is a class of NBFC which is a company and has as its
principal business the receiving of deposits, under any scheme or arrangement or in any
other manner and not being investment, asset financing, loan company.

These companies are required to maintain investments as per directions of RBI, in

addition to liquid assets. The functioning of these companies is different from those of
NBFCs in terms of method of mobilisation of deposits and requirement of deployment of
depositors' funds. However, Prudential Norms Directions are applicable to these
companies also.
 4. SAILENT FEATURES OF NBFC

What are the salient features of NBFC regulations which the depositor may note at the times
of investment?

Some of the important regulations relating to acceptance of deposits by NBFCs are as under:
1. The NBFCs are allowed to accept/renew public deposits for a minimum period of 12
months and maximum period of 60 months. They cannot accept deposits repayable on
demand.

2. NBFCs cannot offer interest rates higher than the ceiling rate prescribed by RBI from time
to time. The present ceiling is 11 per cent per annum. The interest may be paid or
compounded at rests not shorter than monthly rests.

3. NBFCs cannot offer gifts/incentives or any other additional benefit to the depositors.

4. NBFCs (except certain AFCs) should have minimum investment grade credit rating.

5. The deposits with NBFCs are not insured.

6. The repayment of deposits by NBFCs is not guaranteed by RBI.

7. There are certain mandatory disclosures about the company in the Application Form
issued by the company soliciting deposits

8. Public deposits are unsecured.

9. A proper deposit receipt which should, besides the name of the depositor/s state the date
of deposit, the amount in words and figures, rate of interest payable and the date of
maturity should be insisted. The receipt shall be duly signed by an officer authorized by
the company in that behalf.

10. The Reserve Bank of India does not accept any responsibility or guarantee about the
present statements or representations made or opinions expressed by the company
and for repayment of deposits/discharge of the liabilities by the company.

.
 5. REGISTRATION OF NBFC

COMPANY REGISTERED + REGISTRATION WITH RBI = REGISTRATION OF NBFC

(UNDER COMPANIES ACT 1956)

Is it necessary that every NBFC should be registered with RBI?

 In terms of Section 45-IA of the RBI Act, 1934, it is mandatory that every NBFC should be
registered with RBI to commence or carry on any business of non-banking financial
institution as defined in clause (a) of Section 45 I of the RBI Act, 1934.

 However, to obviate dual regulation, certain category of NBFCs which are regulated by
other regulators are exempted from the requirement of registration with RBI

What are the requirements for registration with RBI?

 A company incorporated under the Companies Act, 1956 and desirous of commencing
business of non-banking financial institution as defined under Section 45 I(a) of the RBI
Act, 1934 should have a minimum net owned fund of Rs 2 crore.

Note:

'Owned Fund' means aggregate of the paid-up equity capital and free reserves as
disclosed in the latest balance sheet of the company after deducting therefrom
accumulated balance of loss, deferred revenue expenditure and other intangible assets.

The amount of investments of such company in shares of its subsidiaries, companies in

the same group and all other NBFCs and the book value of debentures, bonds,
outstanding loans and advances made to and deposits with subsidiaries and companies in
the same group is arrived at. The amount thus calculated, to the extent it exceeds 10% of
the owned fund, is reduced from the amount of owned fund to arrive at 'Net Owned Fund'.

 The company is required to submit its application for registration in the prescribed format
along with necessary documents for bank's consideration.

 The bank issues certificate of registration after satisfying itself that the conditions as
enumerated in Section 45-IA of the RBI Act, 1934 are satisfied.
 6. LIST OF DOCUMENTS SUBMITTED WITH
APPLICATION TO RBI

Requirements to be complied with and documents to be submitted to RBI by NBFCs for

obtaining certificate and Registration from RBI

1. Minimum NOF requirement Rs. 200 lakh.

2. Application to be submitted in two separate sets tied up properly in two separate files.
Annex II to be submitted duly signed by the director/Authorized signatory and certified
3.
by the statutory auditors.
Annex III (directors’ profile) to be separately filled up for each director. Care should be
4. taken to give details of bankers in respect of firms/companies/entities in which directors
have substantial interest.
In case the directors are associated or have substantial interest in other companies,
5.
indicate clearly the activity of the companies (whether NBFC or not).
Board Resolution specifically approving the submission of the application and its
6.
contents and authorizing signatory.
Board Resolution to the effect that the company has not accepted any public deposit, in
7. the past (specify period)/does not hold any public deposit as on the date and will not
accept the same in future without the prior approval of Reserve Bank of India in writing.
Board resolution stating that the company is not carrying on any NBFC activity/stopped
8. NBFC activity and will not carry on/commence the same before getting registration from
RBI.
Auditors Certificate certifying that the company is/does not accept/is not holding Public
9.
Deposit.
10. Auditors Certificate certifying that the company is not carrying on any NBFC activity.
11. Net owned fund as on date.
Certifying compliance with section 45S of Chapter IIIC of the RBI Act, 1934 in which
12.
director/s of the company has substantial interest.
13. Details of changes in the Memorandum and Articles of Association duly certified.
14. Last three years Audited balance sheet along with directors & auditors report.
15. Details of clauses in the memorandum relating to financial business.
Details of change in the management of the company during last financial year till date if
16.
any and reasons thereof.
Details of acquisitions, mergers of other companies if any together with supporting
17.
documents.
18. Details of group companies/associate concerns/subsidiaries/holding companies.
Details of infusion of capital if any during last financial year together with the copy of
19.
return of allotment filed with Registrar of Companies.
Details of the bank balances/bank accounts/complete postal address of the
20.
branch/bank, loan/credit facilities etc. availed.
Business plan for next three years indicating market segment to be covered without any
21.
element of public deposits.
22. Cash flow statement, asset/income pattern statement for next three years.
Brief background note on the activities of the company during the last three years and
23.
the reasons for applying for NBFC registration.
II(b) is the company engaged in any capital market activity? If so, whether there has
24. been any non-compliance with SEBI Regulations? (Statement to be certified by
Auditors).
Whether any prohibitory order was issued in the past to the company or any other
25. NBFC/RNBC with which the directors/promoters etc. were associated? If yes, details
there of.
Whether the company or any of its directors was/is involved in any criminal case,
26.
including under section 138(1) of the Negotiable Instruments Act? If yes, details thereof.
Whether the company was granted any permission by ECD to function as Full-fledged
27.
Money Changers?
28. Whether the company was/is authorized by ECD to accept deposits from NRIs.
29. Whether “Fit and Proper” Norms for Directors have been fulfilled.
 7. REPOSIBILITIES OF NBFC

RESPONSIBILITIES
OF
NBFC’S

NBFC’S Not
NBFC’S Not Accepting/Holding
NBFC’S Accepting/ Accepting/Holding Public Deposits
holding Public Public Deposits having Asset Size <
Deposits having Asset Size > Rs 100/- Crore
Rs 100/- Crore

Responsibilities of the NBFCs Accepting /holding Public Deposits

The NBFCs accepting public deposits should furnish to RBI:

1. Audited balance sheet of each financial year and an audited profit and loss account in
respect of that year as passed in the general meeting together with a copy of the
report of the Board of Directors and a copy of the report and the notes on accounts
furnished by its Auditors;
2. Statutory Annual Return on deposits - NBS 1;
3. Certificate from the Auditors that the company is in a position to repay the deposits as
and when the claims arise;
4. Quarterly Return on liquid assets;
5. Half-yearly Return on prudential norms;
6. Half-yearly ALM Returns by companies having public deposits of Rs 20 crore and
above or with assets of Rs 100 crore and above irrespective of the size of deposits ;
7. Monthly return on exposure to capital market by companies having public deposits of
Rs 50 crore and above; and
8. A copy of the Credit Rating obtained once a year along with one of the Half-yearly
Returns on prudential norms as at 5 above.

Responsibilities of NBFC’S Not Accepting/Holding Public Deposits having Asset Size > Rs
100/- Crore

 required to submit a Monthly Return on important financial parameters of the company

 With effect from April 1, 2007 non-deposit taking NBFCs with assets size of Rs 100 crore
and above have been advised to maintain minimum CRAR of 10% and shall also be
subject to single/group exposure norms.
Responsibilities of NBFC’S Not Accepting/Holding Public Deposits having Asset Size < Rs
100/- Crore

 All companies’ not accepting public deposits have to pass a board resolution to the effect
that they have neither accepted public deposit nor would accept any public deposit during
the year.
 8. RATING OF NBFC

It is said that rating of NBFCs is necessary before it accepts deposit? Is it true? Who rates
them?

 An unrated NBFC, except certain Asset Finance companies (AFC), cannot accept public
deposits. (i.e. Non-Depository NBFC does not require rating.)

 An exception is made in case of unrated AFC companies with CRAR of 15% which can
accept public deposit up to 1.5 times of the NOF or Rs 10 crore whichever is lower without
having a credit rating.

 A NBFC may get itself rated by any of the four rating agencies namely, CRISIL, CARE,
ICRA and FITCH Ratings India Pvt. Ltd.

What are the symbols of minimum investment grade rating of different companies?

The symbols of minimum investment grade rating of the Credit rating agencies are:

Name of rating agencies: Level of minimum investment grade credit rating (MIGR)

• CRISIL: FA- (FA MINUS)

• ICRA: MA- (MA MINUS)
• CARE: CARE BBB (FD)
• FITCH Ratings India Pvt. Ltd: tA-(ind)(FD)
• It may be added that A- is not equivalent to A, AA- is not equivalent to AA and AAA- is not
equivalent to AAA.

Can a NBFC which is yet to be rated accept public deposit?

No, a NBFC cannot accept deposit without rating except an EL/HP company complying with
prudential norms and having CRAR of 15%, though not rated, may accept public deposit up to 1.5
times of NOF or Rs 10 crore whichever is less.

When a company's rating is downgraded, does it have to bring down its level of public
deposits immediately or over a period of time?

If rating of a NBFC is downgraded to below minimum investment grade rating, it has to stop
accepting public deposit, report the position within fifteen working days to the RBI and reduce
within three years from the date of such downgrading of credit rating, the amount of excess public
deposit to nil or to the appropriate extent permissible under paragraph 4(4) of Non-Banking
Financial Companies Acceptance of Public Deposits ( Reserve Bank) Directions, 1998; however
such NBFC can renew the matured public deposits subject to repayment stipulations specified
above and compliance with other conditions for acceptance of deposits.
 9. MEANING OF DEPOSIT AND PUBLIC
DEPOSITS

What is 'deposit?'

The term 'deposit' is defined under Section 45 I(bb) of the RBI Act, 1934. 'Deposit' includes and
shall be deemed always to have included any receipt of money by way of deposit or loan or in any
other form but does not include:

• amount raised by way of share capital, or contributed as capital by partners of a firm;

• amount received from scheduled bank, co-operative bank, a banking company, State
Financial Corporation, IDBI or any other institution specified by RBI;
• amount received in ordinary course of business by way of security deposit, dealership
deposit, earnest money, advance against orders for goods, properties or services;
• amount received by a registered money lender other than a body corporate;
• amount received by way of subscriptions in respect of a 'Chit'.
• any amount received from financial institutions;
• any amount received from other company as inter-corporate deposit;
• amount received by way of subscriptions to shares, stock, bonds or debentures pending
allotment or by way of calls in advance if such amount is not repayable to the members
under the articles of association of the company;
• amount received from shareholders by private company;
• amount received from directors or relative of the director of a NBFC;
• amount raised by issue of bonds or debentures secured by mortgage of any immovable
property or other asset of the company subject to conditions that it will include in this
definition if amount raised exceeds the market value of the said immovable property or
other asset
• the amount brought in by the promoters by way of unsecured loan;
• amount received from a mutual fund;
• any amount received as hybrid debt or subordinated debt;
• any amount received by issuance of Commercial Paper.

What is Public Deposit?

• Paragraph 2(1)(xii) of the Non-Banking Financial Companies Acceptance of Public

Deposits ( Reserve Bank) Directions, 1998 defines a ' public deposit' as a 'deposit' as
defined under Section 45 I(bb) of the RBI Act, 1934 and further excludes the following:

 amount received from the Central/State Government or any other source where
repayment is guaranteed by Central/State Government or
 any amount received from local authority or foreign government or any foreign
citizen/authority/person;

Thus, the directions have sought to exclude from the definition of public deposit amount raised from
certain set of informed lenders who can make independent decision.
 10. PRE-PAYMENT OF PUBLIC DEPOSITS

Can a company pre-pay its public deposits?

A NBFC accepts deposits under a mutual contract with its depositors. In case a depositor requests
for pre-mature payment, Reserve Bank of India has prescribed Regulations for such an eventuality
in the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank)
Directions, 1998 wherein

 it is specified that NBFCs cannot grant any loan against a public deposit or make
premature repayment of a public deposit within a period of three months (lock-in period)
from the date of its acceptance,

 however in the event of death of a depositor, the company may, even within the lock - in
period, repay the deposit at the request of the joint holders with survivor clause /
nominee / legal heir only against submission of relevant proof, to the satisfaction of the
company.

 An NBFC subject to above provisions, if it is not a problem company, may permit after the
lock-in period premature repayment of a public deposit at its sole discretion, at the rate of
interest prescribed by the Bank.

 A problem NBFC is prohibited from making premature repayment of any deposits or

granting any loan against public deposits/deposits, as the case may be. The prohibition
shall not, however, apply in the case of death of depositor or repayment of tiny deposits
i.e. up to Rs 10,000 subject to lock-in period of 3 months in the latter case.
 11. LIQUID ASSET REQUIREMENTS
What is the liquid asset requirement for the deposit taking companies?

In terms of Section 45-IB of the RBI Act, 1934

 The minimum level of liquid asset to be maintained by NBFCs is 15 per cent of public
deposits outstanding as on the last working day of the second preceding quarter.

 Of the 15%, NBFCs are required to invest not less than 10% in approved securities and
the remaining 5% can be in unencumbered term deposits with any scheduled commercial
bank.

 Thus, the liquid assets may consist of government securities, government guaranteed
bonds and term deposits with any scheduled commercial bank.

 The investment in government securities should be in dematerialized form which can be

maintained in Constituents' Subsidiary General Ledger (CSGL) Account with a scheduled
commercial bank (SCB) / Stock Holding Corporation of India Limited (SHICL).

 In case of Government guaranteed bonds the same may be kept in dematerialized form
with SCB/SHCIL or in a dematerialized account with depositories [National Securities
Depository Ltd. (NSDL)/Central Depository Services (India) Ltd. (CDSL)] through a
depository participant registered with Securities & Exchange Board of India (SEBI).

 However in case there is Government bonds which are in physical form the same may be
kept in safe custody of SCB/SHCIL.

Where these assets are kept?

 NBFCs have been directed to maintain the mandated liquid asset securities in a
dematerialized form with the entities stated above at a place where the registered office of
the company is situated.

 However, if a NBFC intends to entrust the securities at a place other than the place at
which its registered office is located, it may do so after obtaining in writing the permission
of RBI.

 It may be noted that the liquid assets in approved securities will have to be maintained in
dematerialized form only.

Does Depositors have any claims on them?

 The liquid assets maintained as above are to be utilized for payment of claims of
depositors.

 However, deposit being unsecured in nature depositors do not have direct claim on liquid
assets.
 12. DEFAULT IN REPAYMENT

In case a NBFC defaults in repayment of deposit what course of action can be taken by
depositors?

If a NBFC defaults in repayment of deposit, the depositor can approach

 Company Law Board or

 Consumer Forum or

 file a civil suit to recover the deposits.

Consumer courts play a useful role in attending to depositors problems. Can one approach
consumer forum, civil court, CLB simultaneously?

Yes,

Is there an Ombudsman for hearing complaints against NBFCs?

No,
 13. OTHERS

Whether NBFCs can accept deposits from NRIs?

 Effective from April 24, 2004, NBFCs cannot accept deposits from NRI

 except deposits by debit to NRO account of NRI provided such amount do not represent
inward remittance or transfer from NRE/FCNR (B) account.

 However, the existing NRI deposits can be renewed.

Is nomination facility available to the Depositors of NBFCs?

Yes,

What are various prudential regulations applicable to NBFCs?

The Bank has issued detailed directions on prudential norms, vide Non-Banking Financial
Companies Prudential Norms (Reserve Bank) Directions, 1998. The directions interalia, prescribe
guidelines on income recognition, asset classification and provisioning requirements applicable to
NBFCs, exposure norms, constitution of audit committee, disclosures in the balance sheet,
requirement of capital adequacy, restrictions on investments in land and building and unquoted
shares.
PROBLEMS REGARDING NBFC

1. Can a Private Company become a Depository NBFC ?

No, As Private Company is restricted u/s 3(i) iii of Companies Act 1956 to
invite and accept deposits from Public. But Pvt. Company may become
Non-Depository NBFC.
PROCEDURE TO BE FOLLOWED

07.10.2009 Decide to form NBFC and Selection of Four Names. Filing of

Form 1A.
 SPECIMEN APPLICATION FORM FOR REGISTRATION WITH RBI

FORM OF APPLICATION FOR CERTIFICATE OF REGISTRATION TO

COMMENCE/CARRY ON THE BUSINESS OF A NON-BANKING FINANCIAL
INSTITUTION BY A COMPANY

Name and address of registered

office of the company
(in block letters)
By Registered Post A.D./Hand Delivery

To

The General/Dy. General Manager*,

Department of Non-Banking Supervision
Reserve Bank of India,
Regional Office,
...................................................................
(Place)

Dear Sir,
Application for a Certificate of Registration to commence/carry *on the business
of a non-banking financial institution

We make this application in terms of sub-section (2) of section 45-IA of the

Reserve Bank of India Act, 1934 for issue of a Certificate of Registration. The
required documents/information as per the instructions are furnished.
We are desirous of commencing/carrying on* the business of a non-banking
financial institution. Hence, we hereby request you to kindly issue the necessary
Certificate of Registration under sub-section (1) of section 45-IA of the Reserve
Bank of India Act, 1934 to enable our company to commence/carry on* the
business of a non-banking financial institution.

We declare that to the best of our knowledge and belief the information furnished
in the statements/annexes enclosed hereto is true/correct and complete.
Yours faithfully,
Signature:
Date: Name:
Place: Designation:
Company Seal:
Encl. : ................Sheets
*Strike out whichever is not applicable.
DOCUMENTS REQUIRED TO BE ENCLOSED TO THE APPLICATION FORM
1. Identification particulars (Annex I).
2. Statement on prudential norms (Annex II).
3. Information about the management (Annex III).
4. Certified copies of up-to-date Memorandum and Articles of Association
of the company.
5. Certified copies of Certificate of Incorporation and Certificate of
Commencement of Business.
6. A Board resolution specifically approving the submission of the
application and its contents.
7. A copy each of the Profit and Loss account and audited Balance Sheet
for the last 3 years or for such shorter period as are available (for
companies already in existence).
8. Business plan of the company for the next three years giving details of
its (a) thrust of business; (b) market segment; and (c) projection of
investments and income.
9. A company which is incorporated before January 9, 1997 and has net
owned fund of less than Rs. 25 lakhs as on the date of application, may
also furnish a time-bound programme as to how it proposes to attain
the minimum net owned fund of Rs. 25 lakhs.

INSTRUCTIONS
(Fill up the application form strictly in accordance with these instructions)

GENERAL
(1) Application should be made in the prescribed form only. Wherever
space is insufficient, information may be furnished in separate sheet/s.
(2) Application along with enclosures duly completed should be submitted
in duplicate, before July 8, 1997 to the Department of Non-Banking
Supervision, Reserve Bank of India, Regional Office under whose
jurisdiction the registered office of the company is situated.
(3) A photocopy of the application as submitted may be kept with the
company for its record.
(4) Application should be signed by any of the following officials authorised
by the Board of Directors, in this behalf (viz., Chairman, Managing
Director, Chief Executive Officer, Company Secretary, a whole-time
Director or any other official).
(5) Application should bear common seal of the company.
(6) An acknowledgement for having submitted the application may be
obtained from the Regional Office concerned.
(7) The particulars/information to be furnished in Annex II of the application
should be based on figures as disclosed in the latest annual audited
balance-sheet. However, in the case of a company incorporated after
9-1-1997, such particulars/information should be based on the balance-
sheet as on a date falling within thirty days preceding the date of
application.
annex i
(8) In case the company has changed its name earlier, a list of all the
earlier names of the company and date/s of change together with the
names of Chief Executive Officer and Chairman at the time of change
of name should be furnished.
(9) If the company was registered with Reserve Bank of India in terms of
Circular DFC (COC) No. 828/174-92/93, dated April 12, 1993, the letter
in original advising registration should be enclosed.
(10) If the company has ever defaulted in timely repayment of deposit and
payment of interest, a list of all such pending cases and the action
taken in respect of each case should be furnished. The company
should also submit a list containing the details of all the court cases
pending against it, including those pending in consumer fora, pertaining
to its deposits acceptance activities.

annex ii
(11) This statement is to be filled only by a non-banking financial company
which was in existence as on January 9, 1997 and carrying on
business of a non-banking financial institution.
(12) For filling up Annexure II, please refer to the guidelines to non-banking
financial companies on prudential norms for income recognition,
accounting standards, asset classification, provisioning for bad and
doubtful debts, capital adequacy, concentration of credit/investment,
etc.
(13) The contents of Annexure II should be certified by a Chartered
Accountant.

annex iii
(14) ‘Substantial interest’ means holding of beneficial interest by an
individual or his/her spouse or minor child, whether singly or taken
together, in shares of a company/capital of a firm, the amount paid-up
on which exceeds 10 per cent of the paid-up capital of the company or
total capital subscribed by all the partners of a partnership firm.
 ANNEX I
IDENTIFICATION PARTICULARS

COMPANY CODE
(to be filled by RBI)
........................................
........................................
1.1Name of the
Company..................................................................................................
....

1.2 Whether the company had changed its name earlier?

[Please see item (8) of instructions] Yes/No

2. Date of incorporation
3. Date of commencement of business
4. State in which the company is
registered..............................................................
5. Full Address of the Company
(i) Registered
Office.......................................................................................................
.................................................................................................................
.... ..................
Phone No.
..................................................................Fax.........................................
.. Email:
(ii) Corporate/Administrative*
Office...................................................................
.................................................................................................................
.... .....................

Phone No. ..................................................................

Fax............................................
(iii)No. of branches :

6. Status (a) (b) (c) Deemed public

: Public Private
(d) Government company (e) Other (to be specified)

7. Whether the company was transacting Yes/No

the business of
Non-banking financial institution as on January 9, 1997 ?
If yes—
(i) the date of commencement of such business:
(ii) Classification as made by
RBI..........................................................................
(EL/HP/LC/IC/Nidhi/RNBC/MNBC)
(iii)Reference No. and date of RBI Classification advice.................................

(iv) Whether the company was Yes/No

already registered with RBI?

[Please see item (9) of instructions]

If yes,—
(a) Registration
No. ............................................................................................
(b)Reference No. and date of RBI
advice..................................................

(v) Whether the company has been Yes/No

issued a Certificate in terms of
Circular DFC (COC) No.
2/02/04/96-97, dated July 24,
1996 ?

If yes,—
(a) Certificate No. .......................................
(b)Reference No. and date of RBI advice...................

(vi) Whether the company has ever Yes/No

defaulted in the repayment of
principal and/or payment of
interest on deposits?
[Please see item (10) of instructions]
 (vii)(a)Whether any of the group Yes/No:
companies regulated by
other regulators such as SEBI,
IRDA, etc.
(b) If yes, give details of the
company:
i) Name
ii) Address
iii) Nature of business
iv) Regulator
v) Approval/Certificate/
Registration No.
(c)Action if any initiated/
pending against the company by
the regulator with details
(strictures, penalties,
adjudications, investigations etc)

8.Name/s of Statutory Auditor/s with address/es ..........................................

..........................................
..........................................
9.1 Name/s & Address/es of bankers
..........................................
..........................................
..........................................

9.2 Whether the company has committed Yes/No

any default in repayment of any loan,
advance or any other credit facility
availed from any bank ?
9.3 If yes, furnish full details, such as name of Bank/Branch, type of facility,
period and quantum of default, etc.
10. Name and Designation of CEO/Authorised
official ..........................................
.......................................................................
Signature :
Date : Name :
Place : Designation :
Company Seal :
 Annex II
STATEMENT OF CAPITAL FUNDS AND RISK ASSETS AS ON*........
(Rs. in thousands)
PART A
CAPITAL FUNDS - TIER-I
Item Name Item Code Amount Rs.
(i) Paid-up Equity Capital 111
(ii) Free reserves (Please see note below) :
(a) General Reserves 112
(b) Share Premium 113
(c) Capital Reserves (representing surplus on sale of 114
assets held in separate account)
(d) Debentures Redemption Reserve 115
(e) Capital Redemption Reserve 116
(f) Credit Balance in P & L Account 117
(g) Other free reserves (to be specified) 118
(iii) Total (111 to 118) 110
(iv) Accumulated balance of loss 121
(v) Deferred Revenue Expenditure 122
(vi) Other Intangible Assets 123
(vii) Total (121 to 123) 120
(viii) Owned funds (110 - 120) 130

Note : ‘Free reserves’ shall include balance in share premium account, capital
and debenture redemption reserves and any other reserves shown in the
balance-sheet and created through an allocation out of profits but not being (a) a
reserve created for repayment of any future liability or for depreciation on assets
or for bad debts, or (b) a reserve created by revaluation of assets of the
company.
Item Name Item Code Amount Rs.
(ix) Investment in shares of: [please see Note (1) below] :
(a) Subsidiaries 141
(b) Companies in the same Group 142
(c) Other non-banking financial companies 143
(x) The book value of debentures bonds, outstanding loans and
advances (including hire-purchase and lease finance) made to
and deposits with [please see note (2) below] :
(a) Subsidiaries 144
(b) Companies in the same Group 145
(xi) Total (141 to 145) 140
(xii) Amount of item 140 in excess of 10 per cent of item 130 above 150
(xiii) Tier-I Capital: Net owned funds (130 - 150) 151
 Notes :
1. Investments in shares includes investment in fully convertible debentures
and/or convertible portion of partially convertible debentures. Investments
held either in investment account or stock-in-trade should be included under
this item.
2. Debentures whether held in investment account or by way of stock-in-trade
should be included under this item. Non-convertible debentures, non-
convertible portion of partially convertible debentures and optionally
convertible debentures should also be included under this item.

PART B
CAPITAL FUNDS - TIER-II
Item Name Item Code Amount Rs.
(i) Preference Share Capital 161
(ii) Revaluation reserves (see para 5.2-2 of guidelines) 162
(iii) General provisions and loss reserves (see para 5.2-3 163
of guidelines)
(iv) Hybrid debt capital instruments (see para 5.2-4 of 164
guidelines)
(v) Subordinated debt (see para 5.2-5 of guidelines) 165
(vi) Aggregate Tier-II Capital (161 to 165) (see para 6 of 160
the guidelines)
Total Capital Funds (151 + 160) 170

PART C
RISK ASSETS AND OFF-BALANCE SHEET ITEMS
Item Name Item Code Amount Rs.
(i) Adjusted value of funded risk assets, i.e., on-balance 181
sheet items (Totally with Part D)
(ii) Adjusted value of non-funded and off-balance sheet 182
items (Totally with Part E)
(iii) Total risk-weighted assets/exposures (181 + 182) 180
(iv) Percentage of capital funds to risk-weighted
assets/exposures:
(a) Tier-I capital (Percentage of Item 151 to Item 191
180)
(b) Tier-II capital (Percentage of Item 160 to Item 192
180)
(c) Total (Percentage of Item 170 to Item 180) 193
 PART D
WEIGHTED ASSETS, I.E., ON-BALANCE SHEET ITEMS
Item Name Item Book Risk Adjusted
code value weight value
I. Cash and bank balances including 210 0 0
fixed deposits & Certificates of
Deposits
II. Investments (see paras 2.6-1 to 2.6-7
of the guidelines)—
(a) Government and approved 221 0 0
securities as defined under
section 45-IB of RBI Act, 1934
(b) Shares/debentures/bonds/ units
of mutual funds—
(i) Amounts deducted in Part 222 0 0
‘A’ [Item (ix)]
(ii) Amounts not deducted in 223 100
Part A
III. Current Assets—
(a) Stock on hire (Please see Note 3
below):
(i) Amounts deducted in Part A 231 0 0
[Item (x)]
(ii) Amounts not deducted in 232 100
Part A
(b) Inter-corporate loans/deposits :
(i) Amounts deducted in Part 233 0 0
‘A’ [Item (x)]
(ii) Amounts not deducted in 234 100
Part A
(c) Loans and advances fully 235 0 0
secured by company’s own
deposits
(d) Loans to staff 236 0 0
(e) Other secured loans and
advances considered goods :
(i) Amounts deducted in Part A 241 0 0
[Item (x)]
(ii) Amounts not deducted in 242 100
Part A
 (f) Bills purchased/discounted:
(i) Amounts deducted in Part A 243 0 0
[Item (x)]
(ii) Amounts not deducted in 244 100
Part A
(g) Others (to be specified) 245 100
IV. Fixed Assets: (net of depreciation)
(a) Assets leased out—
(i) Amounts deducted in Part A 251 0 0
[Item (x)]
(ii) Amounts not deducted in 252 100
Part A
(b) Premises 253 100
(c) Furniture & Fixtures 254 100
V. Other assets:
(a) Income-tax deducted at source 255 0 0
(net of provisions)
(b) Advance tax paid (net of 256 0 0
provision)
(c) Interest due on Government 257 0 0
Securities
(d) Others (to be specified) 258 100 0
Total weighted assets (Items 210 to 200 —
258)

Notes :
1. Netting may be done in respect of assets where provisions for depreciation
or for bad and doubtful debts have been made.
2. Unquoted shares are to be valued at cost or break-up value of the shares
(as per last audited balance-sheet of the company concerned), whichever is
less.
3. Stock on hire should be shown net of finance charges; i.e., interest and
other charges, recoverable.
4. Assets which have been deducted from owned fund to arrive at net owned
fund pursuant to Paragraph 5.1 of the guidelines will have a weightage of
‘O’.
 PART E
WEIGHTED NON-FUNDED EXPOSURES/OFF-BALANCE SHEET ITEMS

Items Item Book Conversio Equivalen Risk Adjuste

cod value n factor t value weight d value
e
1. Financial & Other 310 100 100
guarantees
2. Share/debenture 320 50 100
underwriting
obligation
3. Partly paid 330 100 100
shares/debentures
4. Bills 340 100 100
discounted/rediscoun
ted
5. Lease contracts 350 100 100
entered into but yet to
be executed
6. Other contingent 360 50 100
liabilities (To be
specified)
7. Total non-funded 300 - -
exposures (Items 310
to 360)
Note : Cash margin/deposits shall be deducted before applying the conversion
factors.
 PART F
OTHER DATA
I. Aggregate of credit exposures categories into :

Item Name Item Code Amount Rs.

(i) Standard assets 411
(ii) Sub-standard assets 412
(iii) Doubtful assets 413
(iv) Loss assets 414

II. Aggregate provisioning in respect of I above as per the guidelines

prescribed :
Item name Item code Provision Actual
required provision
made
(i) Sub-standard assets (10 per cent 421
of total outstanding)
(ii) Doubtful assets (100 per cent to 422
the extent not covered by
realisable value of security + 20
to 50 per cent of the secured
portion for the period the asset
has remained doubtful)
(see Para 4 of the guidelines)
(iii) Loss assets (100 per cent of the 423
out-standing balance)

III. Other provisions in respect of :

Item name Item code Provision Actual
required provision
made
(i) Depreciation in fixed assets 431
(ii) Depreciation in investments 432
(iii) Loss/intangible assets 433
(iv) Taxation 434
(v) Gratuity/provident fund 435
(vi) Others (to be specified) 436
 PART G
PARTICULARS REGARDING INVESTMENTS IN AND ADVANCES TO
COMPANIES/FIRMS IN THE SAME GROUP AND OTHER NBFCs
Item Name Item Code Amount
Rs.
(i) Outstanding loans and advances to and deposits with 510
subsidiaries and companies in the same Group (Details
enclosed in Appendix No.)
(ii) Investments in shares of subsidiaries, companies in the 520
same Group and non-banking financial companies
(Details enclosed in Appendix No.)
(iii) Investments by way of shares, debentures, loans and 530
advances, leasing, hire-purchase finance, deposits, etc.,
in other companies, firms and proprietary concerns where
directors of the company hold substantial interest (Details
enclosed in Appendix No.)

PART H
PARTICULARS REGARDING CONCENTRATION OF ADVANCES (INCLUDING
OFF-BALANCE SHEET EXPOSURE AND INVESTMENTS) TO PARTIES
OTHER THAN THOSE IN PART G ABOVE

Item Name Item Code Amount

Rs.
(i) Loans and advances, including off-balance sheet 610
exposures, to any single party in excess of 15 per cent of
owned fund of the NBFC (Details enclosed in Appendix
No.)
(ii) Loans and advances, including off-balance sheet 620
exposures, to a single group of parties in excess of 25
per cent of owned fund of the NBFC (Details enclosed in
Appendix No.)
(iii) Investments in other companies in excess of 25 per cent 630
of the owned fund of the NBFC (Details enclosed in
Appendix No.)
Certified that the data/information furnished in this statement are in accordance
with the guidelines issued by the Reserve Bank of India relating to income
recognition, accounting standards, asset classification, provisioning for bad and
doubtful debts, capital adequacy and concentration of credit and investments.
They have been complied from the books of account and other records of the
company and to the best of my knowledge and belief they are correct.
 For and on behalf of
Name of the Company :
Signature :
Date : Name :
Designation :
Place : Company Seal :

AUDITOR’S REPORT

We have examined the books of account and other records maintained

by.....................Limited in respect of the capital funds, risk assets/exposures and
risk asset ratio, etc., as on.............and report that to the best of our knowledge
and according to the information and explanations given to us and as shown by
the record examined by us, the figures shown in Parts A, B, C, D, E, F, G and H
of the statement are correct.
Place:
Date :
Chartered Accountants
 ANNEX III
INFORMATION ABOUT THE PROMOTERS, CHAIRMAN, MANAGING
DIRECTOR, DIRECTORS AND THE CHIEF EXECUTIVE OFFICER OF THE
COMPANY
(PLEASE SEE NOTE ON PAGE 2)
1. Name :
2. Designation : Chairman/Managing Director/
Director/Chief Executive
Officer*
3. Nationality :
4. Age :
5. Business Address :
6. Residential Address :
7. Educational/professional qualifications :
8. Line of business or vocation :
9. Name/s of other companies in which the :
person has held the post of Chairman/
Managing Director/Director/Chief Executive
Officer
10. (i) Whether associated as Promoter, Yes/No
Managing Director, Chairman or Director with
any NBFC including a Residuary Non-
Banking Financial Company which has been
prohibited from accepting
deposits/prosecuted by RBI ?
(ii) If yes, the name/s of the company/ies
11 (i) Whether prosecuted/convicted for any Yes/No
economic offence either in the individual
capacity or as a partner/director of any
firm/company ?
(ii) If yes, particulars thereof :
12. Experience in the business of NBFC (number :
of years)
13. Equity shareholding in the company
No. of shares : ……………………………
Face value : Rs. ………………………..
Percentage to total equity share capital of the :
company ……………………………
14. Name/s of the companies, firms and :
proprietary concerns in which the person
holds substantial interest
(Please see item 14 of instructions)
15. Names of the principal bankers to the :
concerns at 14 above
Signature :
Date : Name :
Place: Designation :
(Chief Executive Officer)
Company Seal :

Note : Separate form should be submitted in respect of each of such

functionaries, by using photocopy of this format