Appendices‑Part IV
NON‑BANKING
FINANCIAL COMPANIES DIRECTIONS
[App. 61 to 65]
NON‑BANKING FINANCIAL COMPANIES ACCEPTANCE OF PUBLIC DEPOSITS
(RESERVE BANK) DIRECTIONS, 1998, DATED 31‑1‑1998
[Notification No. DFC.
118/DG(SPT)‑98, dated 31‑1‑1998]
Note
The NBFC Acceptance of Public Deposits (RB) Directions, 1998 issued on
31‑1‑1998 (w.e.f. 31‑1‑1998) supersedes the earlier
NBFC (RB) Directions, 1998 of dt. 2‑1‑1998
The Reserve Bank of India
having considered it necessary in the public interest and being satisfied that
for the purpose of enabling the Bank to regulate the credit system to the
advantage of the country, it is necessary to give the directions set out below,
hereby, in exercise of the powers confefred by sections 45J, 45K, 45L and 45MA
of the Reserve Bank of India Act, 1934 (2 of 1934) and of all the powers
enabling it in this behalf, and in supersession of the earlier directions
contained in Notification No. DFC. 114/DG(SPT)‑98, dated January 2, 1998
gives to every non banking financial company the directions hereinafter
specified:
1. Short title and commencement of the directions.‑ These directions shall be
known as the "Non‑Banking Financial Companies Acceptance of Public
Deposits (Reservel; Bank) Directions, 19W. They shall come into force with
effect from January 31, 1998 and any reference in these directions to the date
of commencement thereof shall be deemed to be a reference to that date.
2. Definitions.‑ (1) For the purpose of these directions, unless the
context otherwise requires,
(i) "depositor" means any person
/who has made a deposit with a company; or a heir, legal representative,
administrator or assignee of the depositor;
(ii) "equipment leasing company"
means any company which is a financial institution carrying on as its principal
business, the activity of leasing of equipment;
(iii) "free reserves" means the
aggregate of the balance in the share premium account, capital and debenture
redemption reserves and any other reserve shown or published in the balance
sheet of a company and created through an allocation of profits not being a
reserve created for repayment of any future liability or for depreciation in
assets or for bad debts or a reserve created by revaluation of the assets of
the company;
(iv) "hire purchase finance company"
means any company which is a financial institution carrying on as its principal
business the activity of hire purchase transactions;
(v) "insurance company" means any
company registered under section 3 of the Insurance Act, 1938 (4 of 1938);
(vi) "investment company" means any
company which is a financial institution carrying on as its principal business
the acquisition of securities;
(vii) "lending public financial institution" means
(a) a public financial institution specified
in or under section 4A of the Companies Act, 1956 (1 of 1956);
(b) a
State Financial, industrial or Investment Corporation; or
(c) a scheduled commercial bank; or
(d) the General Insurance Corporation of
India established in pursuance of the provisions of section 9 of the General
Insurance Business (Nationalisation) Act, 1972 (57 of 1972); or
(e) any other Institution which the Reserve
Bank of India may, by notification, specify in this behalf;
(viii) "loan company" means any company
which is a financial institution carrying ‑on as its principal business
the providing of finance whether by making loans or advances or otherwise for
any activity other than its own but does not include an equipment leasing
company or a hire purchase finance company;
(ix) "mutual benefit financial
company" means any company which is a financial institution notified by
the Central Government under section 620A of the Companies Act, 1956 (1 of
1956);
(ixa) 'mutual benefit company' means a company
not notified under section 620A of the Companies Act, 1956 (1 of 1956) and
carrying on the business of a non‑banking financial institution,
(a) on 9 January, 1997, and
(b) having the aggregate of net owned funds
and preferential share capital of not less than ten lakhs of rupees; and
(c) has applied for issue of certificate of
registration to the bank on or before 9 July, 1997; and
(d) is complying with the requirements
contained in the relevant provisions of the directions issued under section
637A of the Companies Act, 1956 to Nidhi Companies by the Central Government.]
(x) "net owned fund" means net
owned fund as defined under section 451A of the Reserve Bank of India Act, 1934
(2 of 1934) including the paid‑up preference shares which are
compulsorily convertible into equity;
(xi) "non‑banking financial
company" means only the non‑banking institution which is a loan
company or an investment company or a hire purchase finance company or an
equipment leasing company or a mutual benefit financial company;
(xii) "public deposit", includes a
deposit as defined under section 45‑1(bb) of the Reserve Bank of India
Act, 1934 excluding the following:
(a) any amount received from the Central
Government or a State Government or any amount received from any other source
and whose repayment is guaranteed by the' Central Government or a State
Government or any amount received from a local authority or a foreign
Government or any other foreign citizen, authority or person;
(b) any amount received from the Industrial
Development Bank of India established under the Industrial Development Bank of
India Act, 1964 (18 of 1964) or the Life Insurance Corporation of India
established under the Life Insurance Corporation Act, 1956 (31 of 1956) or the
General Insurance Corporation of India and its subsidiaries established in
pursuance of the provisions of section,9 of the General Insurance Business
(Nationalisation) Act, 1972 (57 of 1972), or the Small Industries Development
Bank of India established under the Small Industries Development Bank of India
Act, 1989 (39 of 1989) or the Unit Trust of India established under the Unit
Trust of India Act, 1963 (52 of 1963) or National Bank for Agriculture and
Rural Development established under the National Bank for Agriculture and Rural
Development Act, 1982 or an Electricity Board constituted under the Electricity
(Supply) Act, 1948 or the Tamil Nadu Industrial Investment Corporation Ltd., or
the National Industrial Development Corporation of India Ltd., or the
Rehabilitation Industries Corporation of India Ltd., or the Industrial Credit
& Investment Corporation of India Ltd., or the Industrial Finance
Corporation of India Ltd., or the Industrial Investment Bank of India Ltd. or
the State Trading Corporation of India Ltd., or the Rural Electrification
Corporation Ltd., or the Minerals and Metals Trading Corporation of India Ltd.,
or the Agricultural Finance Corporation Ltd., or the State Industrial and
Investment Corporation of Maharashtra Ltd., or the Gujarat Industrial
Investment Corporation Ltd.,
or Asian Development Bank or International Finance Corporation or any other
institution that may be specified by the RBI in this behalf,
(c) any amount received by a company from
any other company;
(d) any amount received by way of
subscriptions to any shares, stock, bonds or debentures pending the allotment
of the said shares, stock, bonds or debentures and any amount received by way
of calls in advance on shares, in accordance with the Articles of Association
of the Company so long as such amount is not repayable to the members under the
Articles of Association of the Company;
(e) any amount received from a person who at
the time of receipt of the amount was a Director of the company or any amount
received from its shareholders by a private company or by a private company
which has become a public company under section 43A of the Companies Act, 1956
and continues to include in its Articles of Association provisions relating to
the matters specified in clause (iii) of subsection (1) of section 3 of the
Companies Act, 1956 (1 of 1956):
Provided that
the Director or shareholder, as the case may be, from whom the money is
received furnishes to the company at the time of giving the money, a
declaration in writing to the effect that the amount is not being given out of
funds acquired by him by borrowing or accepting from others:
Provided
further, that in the case of joint shareholders of a private company, monies
received from or in the name of the joint shareholders except the first named
shareholder shall not be eligible to be treated as the receipt of money from
the shareholder of the company.
(f) any amount raised by the issue of bonds
or debentures secured by the mortgage of any immovable property of the company,
or by any other asset or with an option to convert them into shares in the
company provided that in the case of such bonds or debentures secured by the
mortgage of any immovable property or secured by other assets, the amount of
such bonds or debentures shall not exceed the market value of such immovable
property/other assets;
(g) any amount brought in by the promoters
by way of unsecured loan in pursuance of stipulations of lending institutions
subject to the fulfilment of the following conditions, namely:
(i) the loan is brought in pursuance of the
stipulation imposed by the lending public financial institution in fulfilment
of the obligation of the promoters to contribute such finance,
(ii) the loan is provided by the promoters
themselves and/or by their relatives, and not from their friends and business
associates, and
(iii) the exemption under this sub‑clause
shall be available only till the loan of financial institution is repaid and
not thereafter;
(h) any amount received from a Mutual Fund
which is governed by the Securities and
Exchange Board of India (Mutual Funds) Regulations, 1996.];
(i) any amount received as hybrid debt or
subordianted debt the minimum maturity . period of which is not less than sixty
months.
(j) any amount received from a relative of
a director of an NBFC.
Note.‑The
deposit shall be accepted only on an application made by the depositor
containing therein that as on the date of deposit, he is related to the
specific director in the capacity of a relative as defined under the Companies
Act, 1956 (1 of 1950);
(k) any amount received by issuance of
commercial paper, in accordance with the guidelines issued by the bank vide
Circular No. IECD. 3/08.15.01/2000‑2001, dated October 10, 2000].
(xiii) "securities" means securities as
defined in section 2(h) of the Securities Contracts (Regulation) Act, 1956 (42
of 1956);
(xiv) "stock broking company" means a
company doing the business of a stock‑ broker or subbroker holding a
valid certificate of registration obtained under section 12 of the Securities
and Exchange Board of India Act, 1992 (15 of 1992); and
(xv) "stock exchange" means a company
recognised as a stock exchange under section 4 of the Securities Contracts
(Regulation) Act, 1956 (42 of 1956).
(2) Words or expressions used but not
defined herein and defined in the Reserve Bank of India Act, 1934 (2 of 1934)
or in the Companies Act, 1956 (Act No. I of 1956) 8 [or Non‑Banking
Financial Companies Prudential Norms (Reserve Bank) Directions, 1998 or the
Residuary Non Banking Companies Reserve Bank) Directions, 1987] shall have the
same meaning as assigned to them in those Acts.
(3) (i) If any question arises as to whether
a company is a financial institution or not, such question shall be decided by
the Reserve Bank of India in consultation with the Central Government and such
decision shall be final and be binding on all the parties concerned.
(ii) If any question arises
as to whether a company which is a financial institution is a loan company or
an investment company or a hire purchase finance company, or an equipment
leasing company, such question shall be decided by the Reserve Bank of India,
having regard to the principal business of the company and other relevant
factors and such decision shall be final and be binding on all the parties
concerned.
Note.‑ The principal business of a financial company,
engaged in both hire purchase financing as well as equipment leasing, will be
decided by the Reserve Bank of India after taking together the volume of both
these types of business and other related factors.
3. Restrictions on acceptance of public deposits by mutual benefit
financial companies‑
(1) On and from January, 31, 1998, no mutual
benefit financial company or mutual benefit company shall,
(i) accept or renew any public deposit
except from its shareholders and such deposit shall not be in the nature of
current account,
(ii) pay any brokerage, commission, incentive
or any other benefit by whatever name called to any person for public deposits
collected by it,
(iii) issue advertisement in any form and in
any media like billboards, hoardings, newspapers, magazines, television, etc.
for inviting or causing to invite deposits from its shareholders.
(2) The provisions contained in paragraphs 4
to 6 except sub‑paragraphs (7), (15) and (16) of paragraph 4 of these
directions shall not apply to a mutual benefit financial company and a mutual
benefit company.
4. Restrictions
on acceptance of public deposits by non‑banking financial companies.‑
(1) Mnimum Credit Rating‑ On and from January 31, 1998,
(i) no non‑banking financial company
having Net Owned Fund (hereinafter referred to as 'NOF') of twenty five lakh of
rupees and above shall accept public deposit unless it has obtained minimum
investment grade or other specified credit rating for fixed deposits from any
one of the approved credit rating agencies at least once a year and a copy of
the rating is sent to the Reserve Bank of India along with return on prudential
norms:
Provided that this clause
shall not apply to an equipment leasing or hire purchase finance company
referred to in clause (a) of sub‑paragraph (4) hereunder.
(ii) in the event of upgrading or downgrading
of credit rating of any non‑banking financial company to any level from
the level previously held by the non‑banking financial company, it shall
within fifteen working days of its being so rated inform, in writing of such
upgrading downgrading to the Reserve Bank of India.
Approved Credit Rating Agencies and Minimum
Investment Grade Credit Rating.‑ The names of approved credit rating agencies and the
minimum credit rating shall be as follows
|
Name of the agency |
Minimum investment Grade Rating |
|
(a) The Credit Rating Information Services of
India Ltd. (CRISIL) |
FAA (FA Minus) |
|
(b) CRA Ltd. |
MAA (MA Minus) |
|
(c) Credit Analysis & Research Ltd. (CARE) |
CARE BBB (FD) |
|
(d) FITCH Ratings India Private Ltd. |
Ind BBBA‑(BBB Minus) Private. Ltd., (DCR India) |
(2) Prohibition from accepting demand deposit.‑ On and from
January 31, 1998, no non banking financial company shall accept or renew any
public deposit whether accepted before or after January 31, 1998, which is
repayable on demand.
(3) Period of Public Deposit.‑ On and from January 31, 1998, no
non‑banking financial company shall accept or renew any public deposit
whether accepted before or after January 31, 1998 unless such deposit is
repayable after a period of twelve months but not later than sixty months from
the date of acceptance or renewal thereof.
CEILING ON QUANTUM OF DEPOSITS
(4) Ceiling on quantum of deposit.‑ Equipment Leasing Company
(ELC), Hire Purchase Finance Company (HPFC), Loan Company (LC) and Investment
Company‑Acceptance of Public Deposit.
No equipment leasing or hire
purchase finance company or loan company or investment company shall, accept or
renew public deposit except as provided hereunder
EL/HPFC
(a) An equipment leasing company or a hire purchase finance
company
(i) having NOF of twenty five lakh of rupees or more; and
(ii) Complying with all the prudential norms
with capital adequacy ratio of not less than fifteen per cent as per last
audited balance‑sheet,
may, accept or renew public
deposit, together with the amounts remaining outstanding in the books of the
company as on the date of acceptance or renewal of such deposit, not exceeding
one and one half times of its NOF or public deposit upto ten crore of rupees,
which ever is lower.
(b) An equipment leasing company or a hire purchase finance
company,
(i) having NOF of twenty five lakh of
rupees or more;
(ii) complying with all the prudential norms;
and
(iii) having minimum investment grade credit
rating, may, accept or renew public deposit, together with the amounts
remaining outstanding in the books of the company as on the date of acceptance
or renewal of such deposit, not exceeding four times of its NOF.
LC/IC
(c) A loan company or an investment company,
(i) having NOF of twenty five lakh of
rupees or more;
(ii) having minimum investment grade credit rating; and
(iii) complying with all the prudential norms with
capital adequacy ratio of not less than fifteen per cent as per last audited
balance‑sheet,
may, accept or renew public
deposit, together with the amounts remaining outstanding in the books of the
company as on the date of acceptance or renewal of such deposit, not exceeding
one and one half times of its NOR
Provided that a
loan company or an investment company which is complying with all the above
conditions and having, as on the date of its coming into force of these
directions, AAA (triple A) grade credit rating but not having capital adequacy
ratio of fifteen per cent may, so long it continues to maintain the same
position of its credit rating, accept or renew public deposit only upto the
extent of not exceeding the amount outstanding as at the close of business on
December 18, 1998 or one and one‑half time of its NOF, whichever is more,
and shall bring down its public deposit to the level as specified in paragraph
4(6) of the directions and also attain the capital adequacy ratio of fifteen
per cent before March 31, 2000.
(d) A loan company or an investment company
which complies with all the prudential norms and having, as on the date of
coming into force of these directions:
(i) NOF of twenty five lakh of rupees or
more; and
(ii) AA (double A) grade credit rating; but
not having capital adequacy ratio of fifteen per cent or above as per last
audited balance‑sheet
may, so long it
continues to maintain the same position of its credit rating, accept or renew
the public deposit together with the amounts outstanding in the books of the
company on the date of acceptance or renewal of such deposit, not exceeding an
amount equivalent to its NOF until it attains the capital adequacy ratio of
fifteen per cent but not later than March 31, 2000 (as per audited balance‑sheet)
with other stipulations remaining the same.
(e) A loan company or an investment company
which complies with all the prudential norms and having, as on the date of
coming into force of these directions;
(i) A (single A) grade credit rating but
not having capital adequacy ratio of fifteen per cent or above as per last
audited balance‑sheet,
(ii) A (single A) grade credit rating but not
having capital adequacy ratio of fifteen per cent or above as per last audited
balance‑sheet;
may, so long it
continues to maintain the same position of its credit rating, accept or renew
the public deposit, together with the amounts outstanding in the books of the
company as on the date of acceptance or renewal of such deposit not exceeding
an amount equivalent to one‑half of its NOF until it attains the capital
adequacy ratio of fifteen per cent but not later than March 31, 2000 (as per
audited balance‑sheet) with other stipulations remaining the same.
(5) Downgrading of Credit Rating.‑ In the event of downgrading of
credit rating below the minimum specified investment grade as provided for in
paragraph 4(4), a non‑banking financial company shall regularise the
excess deposit as provided hereunder:
ELC/HPFC
(i) An equipment leasing company or a hire purchase finance
company shall:
(a) with immediate effect, stop accepting
public deposit, if it is already holding public deposit to the extent
permissible under sub‑clause (b) of paragraph 4(4) above;
(b) report the position within fifteen
working days to the Reserve Bank of India; and
(c) reduce, within three years from the date
of such downgrading of credit rating, the amount of excess public deposit to
nil by repayment as and when such deposit falls due or otherwise.]
(6) Where an equipment
leasing company or a hire purchase finance company or a loan company or an
investment company holds, at the close of business on December 18, 1998 public
deposit in excess of the appropriate extent to which it is entitled to accept
under the provisions of these directions, it shall,
(i) stop accepting public deposit; and
(ii) reduce, before December 31, 2001, the
amount of excess public deposit to nil or the appropriate extent permissible
under sub‑clause (d) or (e) of paragraph 4(4) above as the case may be,
by repayment as and when such deposit falls due or otherwise.
Note:
In the event of excess
public deposits arising out of the regulatory ceiling or downgrading of credit
rating, the NBFC may renew the maturing public deposit subject to the
compliance of the repayment stipulations contained in sub‑paragraphs (5)
and (6) of paragraph 4 and other provisions of these directions. It is to
clarify that no matured public deposit shall be renewed without the express and
voluntary consent of the depositor.
(7) Ceiling on the rate of interest.‑ On and from 1st
November, 2001, no non‑banking financial company shall invite or accept
or renew public deposit at a rate of interest exceeding twelve and a half per
cent per annum. Interest may be paid or compounded at rests which shall not be
shorter than monthly rests.]
(8) Payment of brokerage‑ On and from January 31, 1998 no non‑banking
financial company shall pay to any broker on public deposit collected by or
through him,
(i) brokerage,
commission, incentive or any other benefit by whatever name called, in eicess
of two per cent of the deposit so collected;
(ii) expenses by way of reimbursement on the
basis of relative vouchers/bills produced by him, in excess of 0.5 per cent of
the deposit so collected.
(9) Renewal of public deposit.‑ Where a non‑banking
financial company permits an existing depositor to renew the deposit before
maturity for availing of the benefit of higher rate of interest, such company
shall pay the depositor the increase in the rate of interest provided that,
(i) the deposit is renewed in accordance
with the other provisions of these directions and for a period longer than the
remaining period of the original contract; and
(ii) the interest on the expired period of
the deposit is reduced by one percentage point from the rate which the company
would have ordinarily paid, had the deposit been accepted for the period for
which such deposit had run; any interest paid earlier in excess of such reduced
rate is recovered/adjusted.
(10) Payment of interest on overdue public deposits.‑ A non‑banking
financial company may, at its discretion, allow interest on an overdue public
deposit or a portion of the said overdue deposit from the date of maturity of
the deposit subject to the conditions that:
(i) the total amount of overdue deposit or
the part thereof is renewed in accordance with other relevant provisions of
these directions, from the date of its maturity till some future date, and
(ii) the interest allowed shall be at the
appropriate rate operative on the date of maturity of such overdue deposit
which shall be payable only on the amount of deposit so renewed:
Provided that
whereas NBFC fails to repay the deposit along with interest on maturity on the
claim made by the depositor, the NBFC shall be liable to pay interest from the
date of claim till the date of repayment at the rate as applicable to the
deposit; and
(11) Joint deposit.‑ Where so desired, deposits may be accepted in
joint names with or without any of the clauses, namely, "Either or Survivor",
"Number One or Survivor/s", "Anyone or Survivor/s".
(12) Particulars to be specified in application form soliciting public
deposits
(i) On and from January 31, 1998, no non‑banking
financial company shall accept or renew any public deposit except on a written
application from the depositor in the form to be supplied by the company, which
form shall contain all the particulars specified in the Non‑Banking
Financial Companies and Miscellaneous Non‑Banking Companies
(Advertisement) Rules, 1977, made under section 58A of the Companies Act, 1956
(1 of 1956) and also contain the specific category of the depositor, i.e.
whether the depositor is a shareholder or a director or a promoter of the
company or a member of public.
(ii) The application form should also contain the following:
(a) the credit rating assigned for its fixed
deposits and the name of the credit rating agency which rated the company or a
statement from the management if it is an equipment leasing or a hire purchase
finance company that, the quantum of public deposit held by it is not exceeding
one and one‑half times of its NOF or not exceeding rupees ten crore
whichever is less;
(b) in case of non‑repayment of the
deposit or part thereof as per the terms and conditions of such deposit, the depositor
may approach the Eastern/Western/Northern/Southern (delete which are inapplica-
ble) Bench of Company Law Board whose full address is given hereunder: Give
here the full address of the Bench of the Company Law Board under whose
jurisdiction the registered office of the company is located;
(c) in case of any deficiency of the company
in servicing its deposit, the depositor may approach the National Consumers
Disputes Redressal Forum, the State Level Consumers Disputes Redressal Forum or
the District Level Consumers Disputes Redressal Forum for relief;
(d) a statement that the financial position
of the company as disclosed and the representations made in the application
form are true and correct and that the company and its Board of Directors are responsible
for the correctness and veracity thereof,
(e) the financial activities of the company
are regulated by the Reserve Bank of India. It must, however, be distinctly
understood that Reserve Bank of India does not undertake any responsibility for
the financial soundness of the company or for the correctness of any of the
statements or the representations made or opinions expressed by the company;
and for repayment of deposit/discharge of liabilities by the company;
(f) at the end of application form but
before the signature of the depositor, the following verification clause by the
depositor should be appended. “I have gone through the financials and other
statements/particulars/representations furnished/made by the company and after
careful consideration I am making the deposit with the company at my own risk
and volition".
(g) the information, relating to and the
aggregate dues from the facilities, both fund and non‑fund based,
extended to, and the aggregate dues from companies in the same group or other
entities or business ventures in which the directors and/or the non‑banking
financial company are holding substantial interest and the total amount of
exposure to such entities.
(iii) Every non‑banking financial company
shall obtain proper introduction of the new depositors before opening their
accounts and accepting the deposits and keep on its record the evidence on
which it has relied upon for the purpose of such introduction.
(13) Advertisement and
statement in lieu of advertisement
(i) Every non‑banking financial
company soliciting public deposit shall comply with the provisions of the Non‑Banking
Financial Companies and Miscellaneous Non‑Banking Companies
(Advertisement) Rules, 1977 and shall also specify in every advertisement to be
issued thereunder, the following:
(a) the actual rate of return by way of
interest, premium, bonus other advantage to the depositor;
(b) the mode of repayment of deposit;
(c) maturity period of deposit;
(d) the interest payable on deposit;
(e) the rate of interest which will be
payable to the depositor in case the depositor withdraws the deposit
prematurely;
(f) the terms and conditions subject to
which a deposit will be renewed; and
(g) any other special features relating to
the terms and conditions subject to which the deposit is accepted/renewed.
(h) the information, relating to the
aggregate dues (including the non‑fund based facilities provided to) from
companies in the same group or other entities or business ventures in which,
the directors and/or the NBFC are holding substantial interest and the total
amount of exposure to such entities.
(ii) Where a non‑banking financial
company intends to accept public deposit without inviting or allowing or
causing any other person to invite such deposit, it shall, before accepting
such deposit, deliver to the Reserve Bank of India for record, a statement in
lieu of advertisement containing all the particulars required to be included in
the advertisement pursuant to the Non‑Banking Financial Companies and
Miscellaneous Non‑Banking Companies (Advertisement) Rules, 1977 as also
the particulars stated in clause (i) hereinabove, duly signed in the manner
provided in the aforesaid Rules.
(iii) A statement delivered under clause (ii)
above shall be valid till the expiry of six months from the date of closure of
the financial year in which it is so delivered or until the date on which the
balance sheet is laid before the company in general meeting or where the annual
general meeting for any year has not been held, the latest day on which that
meeting should have been held in accordance with the provisions of the
Companies Act, 1956 (1 of 1956), whichever is earlier, and a fresh statement
shall be delivered after the expiry of the validity of the statement, in each
succeeding financial year before accepting public deposit in that financial
year.
(14) General provisions regarding repayment of public deposit
(i) No non‑banking financial company
shall repay any public deposit within a period of three months from the date of
its acceptance.
NBFCs Acceptance of Public
Deposits (RB) Directions, 1998 § App. 61 1953
(ii) Where a non‑banking financial
company at the request of depositor repays public deposit after the period
indicated in clause (i) above but before its maturity, it shall pay interest at
the following rate:
|
(a) Three months but before expiry of six months. |
No interest |
|
|
(b) Six months but before expiry of 12 months |
Not exceeding ten per cent per annum. |
|
(c) Twelve months but before the date of maturity |
One percentage point less than the rate which the
company would have ordinarily paid, had the deposit been accepted for the
period for which such deposit had run: |
Provided that in the event
of death of a depositor, the deposit may be repaid prematurely to the surviving
depositor/s in the case of joint holding with survivor clause, or to the
nominee or to legal heir/s with interest at the rate which the company would
have ordinarily paid, had such deposit been accepted for the period for which
such deposit had run upto the date of repayment.
(iii) A non‑banking financial company may
grant a loan upto seventy‑five per cent of the amount of public deposit
to a depositor after the expiry of three months from the date of deposit at a
rate of interest two percentage points above the interest rate payable on the
deposit.
(15) Furnishing of receipt to depositor
(i) Every non‑banking financial
company shall furnish to every depositor or his agent or group of joint
depositors, a receipt for every amount received by the company by way of
deposit.
(ii) The said receipt shall be duly signed by
an officer authorised by the company in that behalf and shall state the date of
deposit, the name of the depositor, the amount in words and figures received by
the company by way of deposit, rate of interest payable thereon and the date on
which the deposit is repayable:
Provided that,
if such receipts pertain to instalments subsequent to the first instalment of a
recurring deposit it may contain only name of the depositor and date and amount
of deposit.
(16) Register of deposit
(i) Every non‑banking financial
company shall keep one or more registers in respect of all deposits in which
shall be entered separately in the case of each depositor the following
particulars, namely
(a) name and address of the depositor,
(b) date and amount of each deposit,
(c) duration and the due date of each
deposit,
(d) date and amount of accrued interest or
premium on each deposit,
(e) date of claim made by the depositor,
(f) date and amount of each repayment,
whether of principal, interest or premium,
(g) the reasons for delay in repayment
beyond five working days,
(h) any other particulars relating to the
deposit.,
(ii) The register or registers aforesaid
shall be kept at each branch in respect of the deposit accounts opened by that
branch of the company and a consolidated register for all the branches taken
together at the registered office of the company and shall be preserved in good
order for a period of not less than eight calendar years following the financial
year in which the latest entry is made of the repayment or renewal of any
deposit of which particulars are contained in the register:
Provided that,
if the company keeps the books of account referred to in sub‑section (1)
of section 209 of the Companies Act, 1956 (1 of 1956) at any place other than
its registered office in accordance with the proviso to that sub‑section,
it shall be deemed to be sufficient compliance with the clause if the register
aforesaid is kept at such other place, subject to the condition that the
company delivers to the Reserve Bank of India a copy of the notice filled with
the Registrar of Companies under the proviso to the said sub‑section
within seven days of such filing.
4A. Branches
and appointment of agents to collect deposits‑ On and from 13 January,
2000, no non‑banking financial company shall open its branch or appoint
agents to collect deposits except as provided hereunder:
(i) a non‑banking financial company
having the certificate of registration issued under section 45‑1A of the
Reserve Bank of India Act, 1934 (2 of 1934) and otherwise entitled to accept
public deposits as per paragraph 4(4) of these directions, may open its branch
or appoint agents, if its:
|
(a) NOF is upto Rs. 50 crore |
Within the State where its registered office
situated; and |
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(b) NOF is more than Rs. 50 crore and its credit
rating is AA or above |
Anywhere in India |
(ii)
(a) for the purpose of opening a branch, a
non‑banking financial company shall notify to the Reserve Bank of its
intention to open the proposed branch;
(b) on receipt of such advice, the Reserve
Bank may, on being satisfied that in the public interest or in interest of the
concerned non‑banking financial company or for any other relevant reasons
to be recorded, reject the proposal and communicate the same to the non‑banking
financial company;
(c) if no advice of rejection of the
proposal under (b) above is communicated by the Reserve Bank within 30 days
from the receipt of such advice, the non‑banking financial company may
proceed with its proposal.
4B. Closure of branches.‑ No non‑banking financial company shall close
its branch/office without publishing such intention in any one national level
newspaper and in one vernacular newspaper in circulation in the relevant place
and without advising Reserve Bank of India, before ninety days of the proposed
closure.
5. Information to be included in the Board's report.‑ (1) In every report of the Board of Directors laid before the company
in a general meeting under sub‑section (1) of section 217 of the
Companies Act, 1956 (1 of 1956) there shall be included in the case of a non‑banking
financial company, the following particulars or information, namely:
(i) the total number of accounts of public
deposit of the company which have not been claimed by the depositors or not
paid by the company after the date on which the deposit became due for
repayment; and
(ii) the total amounts due under such
accounts remaining unclaimed or unpaid beyond the dates referred to in clause
(i) as aforesaid.
(2) The said particulars or information
shall be furnished with reference to the position as on the last day of the
financial year to which the report relates and if the amounts remaining
unclaimed or undisbursed as referred to in clause (ii) of the preceding sub‑paragraph
exceed in the aggregate a sum of rupees five lakhs, there shall also be
included in the report a statement on the steps taken or proposed to be taken
by the Board of Directors for the repayment of the amounts due to the
depositors remaining unclaimed or undisbursed.
6. Safe custody of approved securities.‑ On and from January 31,
1998,
(1) Every non‑banking financial
company shall designate one of the scheduled commercial banks as its designated
banker in the place where the registered office of the non‑banking
financial company is situated, intimate in writing to the Regional Office of
the Reserve Bank of India under whose jurisdiction the registered office of the
company is situated, as specified in second schedule hereto and entrust to such
bank the unencumbered approved securities required to be maintained by it in
pursuance to section 45‑IB of the Reserve Bank of India Act, 1934 (2 of
1934):
[* * *]
Provided that
where a non‑banking financial company intends to entrust these securities
to Stock Holding Corporation of India Ltd. or to its designated banker at a
place other than the place at which its registered office is located or to keep
them in the form of Constituent's Subsidiary General Ledger Account with a
scheduled commercial bank, or with a depository participant registered with
Securities and Exchange Board of India under Securities and Exchange Board of
India Act, 1992 (15 of 1992), it shall obtain the prior approval, in writing,
of regional office of the Reserve Bank of India under whose jurisdiction the
registered office of the company is situated, as specified in the Second
Schedule hereto.
(2) The securities mentioned in sub‑paragraph
(1) above shall continue to be entrusted to such designated banker or the Stock
Holding Corporation of India Ltd. or the depository participant or held in the
Constituent's Subsidiary General Ledger Account with the scheduled commercial
bank for the benefit of the depositors and shall not be withdrawn or encashed
or otherwise dealt with by the Non‑banking financial company except for
repayment to the depositors :
Provided that,
(i) a non‑banking financial company
may withdraw a portion of such securities proportionate to the reduction of its
public deposits duly certified to that effect by its auditor;
(ii) where the Non‑Banking Financial
Company intends to substitute such securities, it may do so by entnisdng
substitute securities of equal value to the designated bank before such
withdrawal.
7. Employees Security
Deposit.‑ A non‑banking financial company receiving any amount in the
ordinary course of its business as security deposit from any of its employees
for due performance of his duties shall keep such amount in an account with a
scheduled commercial bank or in a post office in the joint names of the
employee and the company on the conditions that
(1) it shall not withdraw the amount without
the consent in writing of the employee; and
(2) the amount shall be repayable to the
employee along with interest payable on such deposit account unless such amount
or any part thereof is liable to be appropriated by the company for the failure
on the part of the employee for due performance of his duties.
8. Copies
of balance sheet and accounts together with the Directors' report, auditors'
report, notes on accounts and returns to be furnished to the Reserve Bank.‑
(1) Every non banking financial company
accepting/holding public deposit shall deliver to the Reserve Bank of India an
audited balance sheet as on the last date of each financial year and an audited
profit and loss account in respect of that year as passed by the company in
general meeting together with a copy of the report of the Board of Directors
laid before the company in such meeting in terms of section 217(1) of the
Companies Act, 1956 (1 of 1956) within fifteen days of such meeting as also a
copy of the report and the notes on accounts furnished by its Auditor.
(2) Provision
for submitting Auditor's Certificate.‑Every non‑banking
financial company holding/accepting public deposits shall furnish to the
Reserve Bank of India along with a copy of the audited balance sheet as
provided in the sub‑paragraph (1) above, a copy of the Auditor's report
to the Board of Directors and a certificate from its auditor, to the effect
that the full amount of liabilities to the depositors of the company, including
interest payable thereon, are properly reflected in the balance sheet, and that
the company is in a position to meet the amount of such liabilities to the depositors.
(3) Returns
to be submitted to the Reserve Bank of India.‑ Every non‑banking
financial company holding/accepting public deposits shall submit to the Reserve
Bank of India a return furnishing the information specified in the First
Schedule hereto, with reference to its financial position as on the date
specified in the said Schedule.
(4) Every non‑banking financial
company shall, not later than one month from the occurrence of any change in
the following matters, shall intimate to the Reserve Bank of India:
(i) the complete postal address, telephone
number/s and fax number/s of the registered/corporate office;
(ii) the names and residential addresses of the directors of the
company;
(iii) the names and the official designations
of its principal officers;
(iv) the specimen signatures of the officers
authorised to sign on behalf of the company; and
(v) the
names and office address of the auditors of the company.
(5) Balance
sheet, returns, etc. to be submitted to the Department of Non‑Banking Supervision‑
Any balance sheets, returns or information or intimation or statement
required to be submitted or furnished to the Reserve Bank of India in pursuance
of these directions shall be submitted or furnished to the Regional Office of
the Department of Non‑Banking Supervision of the Reserve Bank of India
within' whose jurisdiction the registered office of the company is situated, as
specified in the Second Schedule hereto.
9. Non‑applicability
of the Directions to certain types of non‑banking financial companies.‑
Nothing
contained in paragraphs 4 to 8 of these directions shall be applicable to:
(1) an insurance company holding a valid
certificate of registration issued under section 3 of the Insurance Act, 1938
(IV of 1938); or a stock exchange notified under section 4 of the Securities
Contracts (Regulation) Act, 1956 (42 of 1956) or a stockbroking company defined
in section 12 of the Securities and Exchange Board of India Act, 1992 (15 of
1992);
(2) a loan company, an investment company, a
hire purchase finance company or an equipment leasing company not
accepting/holding any public deposit:
Provided that
the company passes in the meeting of its board of directors within thirty days
of the issue of these directions and thereafter within thirty days of the
commencement of the next financial year and each subsequent financial year,
a resolution to the effect that the
company has neither accepted public deposit nor would accept any public deposit
during the year.
(3) an investment company,
(i) which has acquired shares/securities of
its own group/holding/ subsidiary companies only and such acquisition is not
less than ninety per cent of its total assets at any point of time;
(ii) which does not trade in such
shares/securities; and
(iii) which does not accept1hold any public
deposit:
Provided that
the company passes in the meeting of its board of directors within thirty days
of the issue of these directions and thereafter within thirty days of the
commencement of each subsequent financial year a resolution to the effect that
the company has invested or would invest/hold its investments in the
shares/securities of its group/holding/subsidiary companies of not less than 90
per cent of its assets and (name of each company to be specified), that it would
not trade in such shares/securities and that it has neither accepted nor would
accept any public deposit during the year.
9A.
Nothing contained in paragraphs 4 to 7 shall apply to an NBFC being a
Government company as defined under section 617 of the Companies Act, 1956 (1
of 1956).
10. Exemptions.‑ The Reserve Bank of India
may, if it considers necessary for avoiding any hardship or for any other just
and sufficient reason, grant extension of time to comply with or exempt any
company or class of companies from all or any of the provisions of these
directions either generally or for any specified period subject to such
conditions as the Reserve Bank of India may impose.
11. Saving
of action taken or that may be taken for contravention of the Non‑Banking
Financial Companies (Reserve Bank) Directions, 1998.‑ It is hereby clarified that
the supersession of the Non‑Banking Financial Companies (Reserve Bank)
Directions, 1988 contained in Notification No. DFC. 114/DG(SPT)‑98, dated
January 2, 1998 shall not in any way affect
(i) any right, obligation or liability acquired, accrued or
incurred thereunder;
(ii) any penalty, forfeiture or punishment
incurred or suffered in respect of any contravention committed thereunder; and
(iii) any investigation, legal proceeding or
action in respect of any such right, privilege, obligation, liability, penalty,
forfeiture or punishment taken or arising under the said directions,
and any such investigation,
legal proceeding or action may be instituted, continued, or enforced and any
such penalty, forfeiture or punishment may be imposed as if those directions
had not been superseded.
12. Applicability
of the directions to companies other than those mentioned in paragraph 2(1).‑
The provisions of these Directions, as in
force for the time being, shall apply to or in relation to every company which
is a financial institution but does not belong to any of the categories of the
companies mentioned in sub‑paragraph (1) of paragraph 2 of these
directions or is not a miscellaneous non‑banking company within the
meaning of the Miscellaneous Non‑Banking Companies (Reserve Bank)
Directions, 1977 or is not a Residuary Non‑Banking Company within the
meaning of Residuary Non‑Banking Companies (Reserve Bank) Directions,
1987 as they apply to or in relation to a loan company.
(To be submitted by all Non‑Banking
Financial Companies accepting/holding public deposits, and MNBCs‑except
Residuary Non‑Banking Companies)
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File Number |
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ID Number |
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Nature of business |
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District Code |
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State Code |
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(To be filled in by RBI) |
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Name of the Company:
_____________________________________________
Instructions for filling in
the return‑General
1. This return should be submitted by a
Non‑Banking Financial Company covered by para 8(3) of Notification No.
DFC. 118/DG(SPT)‑98, dated January 31, 1998, and by a miscellaneous non
banking company covered by para 11 of Notification No. DNBC.39/DG(H)‑77,
dated June 20, 1977, to the Regional Office of Department of Non‑Banking
Supervision, Reserve Bank of India, where its registered office is situated,
once a year, after March 31 and latest by September 30, with reference to its
position as on March 31, irrespective of the date of closing of the financial
year of the company concerned. A certificate from the auditors of the company
should be appended to the return as per format furnished herewith. However,
only in respect of Part 3, the information should be furnished as per the
latest balance‑sheet but preceding the date of the return.
N.B. In terms of
Notification No. DNBS. 135/CGM/(VSNM)‑2000, dated 13‑1‑2000,
NBFCs shall prepare their balance‑sheets and profit and loss accounts as
on March 31, every year with effect from its accounting year ending with 31st
March, 2001. Therefore, with effect from accounting year ending 31st March,
2001, the information in Part 3 of the return shall be as on the date of
current balance‑sheet thus coinciding with the date of return.
2. Submission of the return should not be
delayed for any reason such as the finalisation/completion of the audit of the
annual accounts. The compilation of the return should be on the basis of the
figures available in the books of account of the company and should be
certified by its statutory auditors.
3. The number of accounts should be given
in actual figures while the amounts of deposits should be shown in lakhs of
rupees. The amount should be rounded off to the nearest lakh. Illustratively,
an amount of Rs. 4,56,100 should be shown as 5 and not as 4.6 or 5,00,000.
Similarly, an amount of Rs. 61,49,500 is to be shown as 61 and not as 61.5 or
61,00,000.
4. The return should be signed by a
manager (as defined in section 2 of the Companies Act, 1956), and if there is
no such manager, by managing director or any official of the company who has
been duly authorised by the board of directors and whose specimen signature has
been furnished to the Reserve Bank of India for the purpose. In case the
specimen signature has not been furnished in the prescribed card, the return
must be signed by the authorised official and his specimen signature furnished
separately.
5. In case there is nothing to report in
any part/item of the return, the relevant part/item may be marked
"Nil" in the column meant for "No. of accounts" and 00s may
be indicated in the column meant for "Amount'.
6. "Subsidiaries" and
"companies in the same group" mentioned in this return have the same
meanings as assigned to them in section 4 and section 372(11), respectively, of
the Companies Act, 1956, as appearing prior to amendment to the Companies Act
dated 31st October, 1998.
7. In case this return is being filed
through electronic media (internet), to the specified web server, a hard‑copy
of the same may be submitted to the concerned regional office duly signed.
1. Name of the Company : __ __ __ __ __ __ __ __ __ __ __ __
__
__ __ __ __ __ __ __ __ __ __ __
2. Address of the registered office : __ __
__ __ __ __ __ __ __ __ __ __
__
__ __ __ __ __ __ __ __ __ __ __
PIN : __ __ __ __ __ __ __
Phone Nos. : __
__ __ __ __ __ __ __ __ __ __ __
Fax No. : __
__ __ __ __ __ __ __ __ __ __ __
E‑Mail : __
__ __ __ __ __ __ __ __ __ __ __
3. Name of the State in which the company
is registered : __ __ __ __ __ __ __ __ __ __ __ __
__
__ __ __ __ __ __ __ __ __ __ __
__
__ __ __ __ __ __ __ __ __ __ __
4. Address of the corporate/head office : __ __ __ __ __
__ __ __ __ __ __ __
__
__ __ __ __ __ __ __ __ __ __ __
__
__ __ __ __ __ __ __ __ __ __ __
PIN : __ __ __ __ __ __ __
Phone Nos. : __
__ __ __ __ __ __ __ __ __ __ __
Fax No. : __
__ __ __ __ __ __ __ __ __ __ __
E‑Mail : __
__ __ __ __ __ __ __ __ __ __ __
5. Date of incorporation : __ __ __ __ __ __ __ __ __ __ __ __
6. Date of commencement of business : __ __ __ __
__ __ __ __ __ __ __ __
7. Name and residential address of : __ __ __
__ __ __ __ __ __ __ __ __
(i) Chairman : __ __ __ __ __ __ __ __ __ __ __ __
__
__ __ __ __ __ __ __ __ __ __ __
__
__ __ __ __ __ __ __ __ __ __ __
(ii) Managing Director/CEO : __ __ __ __ __ __ __ __ __ __ __ __
__
__ __ __ __ __ __ __ __ __ __ __
__
__ __ __ __ __ __ __ __ __ __ __
8. Is it a Government company (Please Yes __
__ No __ __
tick)
9. Status of the company (please tick)
(i) Public Ltd. __
__ __
(ii) Deemed public __
__ __
(iii) Private Ltd. __
__ __
(iv) Joint venture __
__ __
10. Financial year of the company
11. Nature of Business
12. Status of registration with RBI
(i) Number and date of certificate : __ __ __ __ __ __ __ __ __ __ __ __
of registration
if issued by RBI
(ii) If not registered, indicate : __ __ __ __ __ __ __ __ __ __ __ __
whether the
application __ __
__ __ __ __ __ __ __ __ __ __
submitted for
registration is __ __
__ __ __ __ __ __ __ __ __ __
rejected/pending
13. Classification of the company (if : __ __ __
__ __ __ __ __ __ __ __ __
given by the Reserve Bank as __ __ __ __ __ __ __
__ __ __ __ __
HP/Leasing/Loan/
Investment/MBC, __ __ __
__ __ __ __ __ __ __ __ __
etc., and reference number
and date
of such classification)
14. Credit rating:
(i) Rating assigned : __ __ __ __ __ __ __ __ __ __ __ __
(ii) Date of rating : __ __ __ __ __ __ __ __ __ __ __ __
(iii) Name of the rating agency : __ __ __ __ __ __ __ __ __ __ __ __
(iv) Whether any change has : __ __ __ __ __ __ __ __ __ __ __ __
occurred since
the last
rating (details)
15. Number of branches/offices : __ __ __ __ __ __ __ __ __ __ __ __
(please enclose a list of
names
and addresses thereof in the
format given below as per
note 1)
16. If a subsidiary company, please : __ __
__ __ __ __ __ __ __ __ __ __
indicate the name and
address
of the holding company
17. If the company is having : __ __ __ __ __ __ __ __ __ __ __ __
subsidiaries/associate
companies,
number thereof.
(Please enclose a list of
names,
addresses, names of
directors and
particulars of business
activities
thereof in the format given
below
as per note 2)
18. If a joint venture, name and address : __ __ __ __ __ __ __ __ __ __ __ __
of the promoting
institution(s)
19. Name of the company's statutory : __ __ __
__ __ __ __ __ __ __ __ __
auditors with address and
phone
numbers
20. Name(s) of the company's bankers : __ __ __ __
__ __ __ __ __ __ __ __
with addresses and phone numbers
Note (1) : Format for
detailing the branches
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Sl. No |
Name of the branch |
Date of opening |
Address |
City |
District |
State |
Amount of public deposit |
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
(8) |
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Total No. of branches |
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Total public deposits of all the branches ______
(Amount) |
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Total public deposits as per balance-sheet |
|
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dated ________
______ (Amount) |
Note (2): Format for
detailing the subsidiaries
|
Sl.No |
Name of the subsidiary |
Address |
Name of the director |
Business activity |
|
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Details of assets and
liabilities (as on March, 31, 200___)
|
Item No. |
Particulars |
Item Code |
Number of Accounts |
Amount |
|
(1) |
(2) |
(3) |
(4) |
(5) |
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1 . |
Deposits received from public in the form of Fixed
Deposits, Recurring Deposit, etc. |
111 |
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2. |
(i) Deposits received from shareholders by a
Public Limited Company (other than Nidhis) (ii) Deposits received from joint shareholders
other than the first named shareholders by a Private Limited Company |
112 113 |
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1975