non banking financial companies - 2007

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Non Banking FinancialCompanies - 2007

Dr P Janakiramudu andProf Chowdari Prasad

January 19, 2008
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NBFCs Research PJCP 2008 2

Indian Financial System

Development Financial Institutions IFCI,IIBI, TFCI, EXIM Bank, SIDBI, NABARD, NHB,IL& FS, IDFC., etc..

Commercial Banks PSBs (including StateBank Group), Private (Old & New), Foreign,Cooperative and Local Area Banks

Non Banking Financial Companies Others National Small Savings/Post Office

Schemes (GOI) and Stock Exchanges...


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NBFCs - Business Incorporated under Companies Act, 1956

Registered with RBI/ SEBI/ IRDA/ PFRDA/ NHB Acceptance of Public Deposits and / or

Engaged in Financial Services like - 1.Lease Financing2.Hire Purchase 3.Bill Discounting 4.Insurance 5.MerchantBanking 6.Stock Broking 7.Housing Finance 8.Investmentsin Securities 9.Granting of loans 11.Factoring and Forfaiting12.Credit Rating 13.Credit Information Bureau 14.CreditCard Companies 15.Mutual Funds 16.Primary Dealers

17.Asset Reconstruction 18.Securitisation 19. Chit Funds20. Nidhis (Mutual Benefit Companies), 21. VC / PE funding,22. Micro Financing, etc.

Banks, SIDBI and NABARD extend loans to NBFCs


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VARIOUS COMMITTEES Bhabatosh Dutta Study Group - 1971 James Raj Study Group - 1975 Sukhmoy Chakravarty Committee - 1985

Narayan Vaghul Committee - 1987 S Narasimham Committee on FSR - 1991 Dr A C Shah Committee - 1992

Khanna Group - 1996 Mrs Shere Committee - 1997 CM Vasudev Task Force - 1998


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NBFCs : CLASSIFICATION

FUND BASED ACTIVITIES Deposits, Equipment Leasing, Hire

Purchase, Bills Discounting, Loans/

Investments, Housing Finance, Factoring,Forfaiting, ARCs, Credit Cards etc.

FEE BASED ACTIVITIES Issue Management, Portfolio Management,

Corporate Counselling, Loan/Lease Syndi-cation, M & A, Capital Restructuring, CreditRating, CIBIL,etc.


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Acceptance of Deposits : Rules

Banking Laws (Misc Provns) Act, 1963 NBFC Directions, 1977 MNBCs Directions, 1977

RNBCs Directions, 1987 Amendments to RBI Act and Issue of NBFCs Acceptance of Public Deposits(RBI) Directions 1998 ( in place of earlier Directions, 1977) and from time to time


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Prudential Norms......contd.8. Rules for release of Advertisement soliciting

deposits9. Disclosures in Deposit Application Forms10. Exposure norms / ceilings for lending11. Income Recognition and Asset Classification

norms NPAs and Provisioning for bad debts12. 20% Reserve transfer from Profits every year 13. Asset Liability Management System14. Statutory Audit as per RBI Guidelines15. Corporate Governance requirements16. Know Your Customer (KYC) norms compliance


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Some Data on NBFCsSource : Trend and Progress of Banking in

India, 2006-2007 : Reserve Bank of India
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1.Number of NBFCs regd with RBI


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2. Profile of NBFCs


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3.Share of Public Deposits of NBFCs inBroad Liquidity (L3) of Total SCBs Deposits


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4. Major components of LiabilitiesNBFCs-D-Group-wise


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5.Public Deposits held byNBFCs-D-Group-wise


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7. Public Deposits held by NBFCs-Region-wise


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8. Distribution of Public Deposits of NBFCs-D according to Rate of Intt


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9. Maturity Pattern of PublicDeposits held by NBFCs-D


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11. Borrowings by NBFCs-D


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l f f


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13. Financial Performance of NBFCs


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Some more data......

To refer to www.rbi.org.in Trends andProgress of Banking in India, 2007
http://www.rbi.org.in/http://images.google.co.in/imgres?imgurl=http://lh3.google.com/_FiSjqgnQ35Y/RuUWr_J2PhI/AAAAAAAADYA/n2bkcbggb28/s800/IMG_2050.jpg&imgrefurl=http://picasaweb.google.com/lh/photo/Ef3FiJuFmcGCX6q0AXjLvg&h=800&w=600&sz=58&hl=en&start=13&tbnid=0muoNNWeXbDzYM:&tbnh=143&tbnw=107&prev=/images%3Fq%3DReserve%2BBank%2Bof%2BIndia%26gbv%3D2%26svnum%3D10%26hl%3Den%26sa%3DGhttp://www.rbi.org.in/

non banking financial companies - 2007

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