NON-BANKING FINANCIAL COMPANY
NBFC REGISTRATION
What is NBFC Registration
In terms of Section 45-1A 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 the clause of section 45i of the RBI Act, 1934.
Difference between Banks & NBFCs :-
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NBFCs are doing functions akin to that of banks. however, there are a few differences.
NBFC cannot accept demand deposist it is not a part of the payment and settlement system and as much cannot issue cheques to its customers.
deposit insurance facility is not available for NBFC depositors unlike in case of banks.
Features of NBFCs:Â 1.
Registration with RBI is Mandatory. All the NBFC are not entitled to accept public deposits.
2. NBFC can accept a public deposit for a minimum period of 12 months and maximum of 60 months.
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They cannot accept deposits repayable on demand.
4.
NBFCs cannot offer interest rates higher than the celling rate prescribed by RBI from time to time.
ON-BANKING FINANCIAL INSTITUTIONS HAVE THE IMPORTANCE OF INDIAN ECONOMY. 1. FLEXIBILITY IN TAPPING RESOURCES. 2. RETAIL SERVICES TO SMALL AND MEDIUM BUSINESS. 3. IMPORTANT COMPONENT OF THE FINANCIAL MARKET.
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